KUALA LUMPUR – Malaysia’s exports grew 8.8% to RM82.9 billion in June, exceeding market expectations compared with a 25.5% contraction in May.
The Department of Statistics Malaysia (DOSM) said the export growth in June was attributed to higher exports to China by RM4.7 billion, the US by RM2.1 billion and Hong Kong by RM1.4 billion.
Imports, however, dropped 5.6% year-on-year (yoy) to RM62 billion. Consequently, the country’s trade surplus swelled to RM20.9 billion — a 98.7% jump from a year ago, making it the largest trade surplus recorded thus far. The previous largest trade surplus was recorded in October 2019 with a value of RM17.3 billion, according to DOSM.
The main products which contributed to the expansion in exports were electrical and electronic products (+RM4.5 billion), rubber products (+RM1.8 billion), palm oil and palm oil-based agricultural products (+RM1.5 billion), optical and scientific equipment (+RM993.6 million) and machinery, equipment and parts (+RM951.4 million).
The sectors that experienced a drop in imports were petroleum products (-RM2.4 billion), transport equipment (-RM1.7 billion) and crude petroleum (-RM1.1 billion), according to DOSM.
Domestic exports, which involved high value-added activities, rebounded to a four-month high of 9.5% yoy to RM70 billion in June, supported by an increase in sales of electrical & electronics, palm oil, machinery, optical & scientific equipment, and rubber products, among others.
Similarly, re-exports came in at RM12.9 billion, registering an increase of 5.3% yoy and accounting for 15.5% of total exports, said DOSM.
Looking ahead, the pace and strength of export recovery in the second half of 2020 (2H20) will depend on sustainability of production and demand, said economists, adding that there are lingering risks amid signs of a new wave of COVID-19 infections across the region.
The higher base effect in 2H20 would also infer a moderation and uneven growth trend over the coming months.
On a positive note, economists said oil exports should gradually recover in line with OPEC+ agreement to ease output restrictions from August.