KUALA LUMPUR (Nov 1): Malaysia’s export growth is expected to slow to 15.9% in September, says RAM Rating Services Bhd (RAM Rating), largely due to expectations of further tapering in growth of exports to China and Singapore.
 
Likewise, import growth is estimated to slow to 18.2% in September, given its strong correlation as a key input factor for Malaysia's export goods, the rating agency said in a statement today.

As such, trade surplus is projected to come in at RM7.6 billion in September. The trade surplus widened to RM9.9 billion in August from RM8 billion in July.
 
“This is in line with the projected moderation in restocking activities for electronic goods, which is one of the main drivers of export growth, once inventory requirements have been fulfilled”, it said.

Malaysia's year-on-year exports growth, which spiked at 30.9% in July, moderated to 21.5% in August, while imports growth, which came in at 21.8% in July, grew 22.6% in August.

Meanwhile, the rating agency highlighted that imports of consumption goods is anticipated to continue to be resilient — particularly demand for necessities, as growth has been mainly driven by such consumer items — supported by an expected strengthening in private consumption.
 
“With the normalisation of labour conditions and growth, underpinned by favourable demographics, private consumption is anticipated to strengthen, thereby feeding the robust expansion of imported consumption goods”, it explained.
 
Since the beginning of this year, imports of consumption goods have been trending upwards. It spiked to 21.9% in July, the highest in 16 months, before moderating to 17.8% in August.
 
Moving forward, the rating agency said imports and exports "are envisaged to keep expanding at a healthy pace", though the upticks will be more moderate, due to the higher-base effects from the second half of 2016.
 
“This [the growth] will be facilitated by buoyant industrial activity and upbeat global demand”, it added.