Several things to note about the external balance. Goods exports are likely to plunge 6% this year, while import growth may come in around 4%. No surprise then that the trade deficit widens to USD 10bn this year. Yet, this does not necessarily mean that we should be too concerned about the external balance. Overseas foreign workers remittances remain strong and expect to see a gross total of USD 25bn this year.
The overall current account is set to record another surplus, to the tune of USD 11bn this year, about 4% of GDP. Talking about export growth, it is also encouraging that exports of electronic products continue to outperform overall export growth. This is important as the manufacturing sector is increasingly crucial for longer-term GDP growth outlook, especially as the economy continues to diversify away from its dependence on the services sector.
