Malaysia June exports surprise on the upside in contrast to expectations

Malaysia’s exports surprised on the upside during the month of June, compared to a year ago period, remaining starkly in contrast to what markets had earlier expected.

Malaysian headline export growth registered a healthy expansion of 3.4 percent y/y, against market consensus of a 3.7 percent decline. Imports also surged, and by an even bigger margin of 8.3 percent. With that, overall trade balance reported a surplus of MYR 5.5 billion, up from MYR 3.3 billion in the previous month.

While exports of crude oil, palm oil and Liquefied Natural Gas have continued to decline, acceleration in electronics sales by 4.9 percent, as well as strong showing in refined petroleum products have lifted the overall export performance. Exports of LNG and crude oil fell 29.2 and 7.3 percent respectively.

In addition, the country’s exports to the United States recorded the highest year-on growth in June, jumping 22 percent, buoyed by higher shipments of electrical and electronic products, as well as optical and scientific equipment.

Further, trade to the European Union rose 4.1 percent from a year ago period, while those to China fell 20.3 percent as exports of commodities and manufactured goods fell.

Meanwhile, Bank Negara unexpectedly lowered the Overnight Policy Rate (OPR) by 25 basis points to 3.00 percent in its monetary policy meeting last month. The move came despite a unanimous market consensus for a status quo, following a series of rate cuts by other central banks.