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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the latest trade balance figures in the Malaysian economy.

Key Quotes

“Exports rebounded to expand 8.8% y/y in June (May: -25.5%) which exceeded Bloomberg consensus (-10%) and our expectation (-14.7%). Imports eased further to -5.6% y/y (May: – 30.4%). The trade surplus doubled to a record MYR20.89bn in June (May: MYR10.39bn).”

“Key sectors that lifted overall exports were manufactured goods (13.7% y/y) and agriculture (30% y/y) which was partly offset by sustained declines in mining (-45.6% y/y). Key export components that led the expansion were electrical and electronic products, rubber products, other manufactures especially solid-state storage devices (SSD), optical scientific equipment, machinery equipment and pats, wood products, iron and steel products as well as manufactures of metal.”

“Malaysia’s June export performance leads the region. This can be attributed to a diversified export base, easing of supply chain disruptions, resumption of production to fulfil backlog of orders, and release of pent-up demand. The stronger-than-expected exports augurs well for June’s manufacturing production (release on 7 Aug) and infers a narrower 2Q20 GDP decline (release on 12 Aug).