KUALA LUMPUR (July 6): AmBank Group Research said Malaysia’s latest trade figures were not worrying after both the exports and imports performed modestly with exports up 3.4% year-on-year (y/y) while imports rose 0.1% y/y in May, bringing the May trade surplus to RM8.1 billion.

In a note today, AmBank group chief economist and head of research Dr Antony Dass said the weak performance was partly due to the high base impacting both exports and imports.

“Besides, Electrical & Electronics as well as petroleum products slowed down while all the import components fell, added with a weaker growth from imports for re-exports,” he said.

Dass said he was not worried over the latest trade figures as the average growth in exports and imports for the first two months of 2Q2018 are 8.7% y/y and 4.6% y/y respectively, higher than the 6.0%y/y and -0.3%y/y reported in 1Q2018.

“Thus, we expect 2Q2018 GDP to stay strong with our preliminary estimates at 5.5%–5.6% from 5.4% in 1Q2018 supported by exports and private consumption following the removal of the GST in June, to be replaced with SST in September, and the spending for the GE14 on May 9. 

“We reiterate that our 2018 GDP estimate at 5.5% is at the lower end of BNM’s forecast of 5.5–6.0%, and expect the policy rate to be left unchanged at 3.25% for the rest of 2018,” he said.