Malaysia April export fall seen accelerating

Published: 2009/06/02

MALAYSIA’s April exports are set to fall at a faster pace than in March on an annual basis and any upturn for Asia’s third most trade dependent economy will only come in the second half of the year, economists said. The country’s exports are likely to fall 22 per cent in April from a year earlier, according to a Reuters poll of 12 economists, after a 15.6 per cent decline in March.

Analysts said still weak electrical and electronics demand and the high base effect from strong commodity prices last year continued to plague the economy. “The export outlook in the second quarter will not be much different from the first quarter. The recession that we’re seeing now in Malaysia is largely export-driven,” said Azrul Azwar Ahmad Tajudin, senior economist at Bank Islam.

Central bank data last week showed private sector consumption rose 2.1 per cent in the first quarter of 2009 from a year earlier while exports fell 15.2 per cent as the economy contracted by 6.2 per cent from a year ago. Some of the economists said sequential improvements in Malaysia’s exports since January may be early signs that the pace of decline is decelerating.

“If you look at the headline figures it looks like things are deteriorating but in actual fact, Malaysia’s exports are improving month-on-month and the bottom was registered in January,” said Irvin Seah, an economist at DBS Bank. In the wake of the first-quarter growth numbers, the government has revised down the official GDP forecast for 2009 to a contraction of 4-5 per cent from an earlier projection of a one per cent decline at the worst.

“Malaysia had already experienced a drastic contraction within the first quarter of 2009. We do anticipate a narrowing of economic contraction underpinned by the improvement in the trade segment and an overall boost in government spending moving forth,” said TA Securities economist, Patricia Oh. “Hence, total export value may be boosted by the increase in international demand and shipment abroad.” April imports are expected to decline 27.5 per cent from a year earlier while the trade surplus is estimated at RM12.1 billion (US$3.5 billion).