Trade surplus edges down in July, but exports show strength

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Malaysia's trade surplus fell in July from the previous month, but exports showed better-than-expected strength, the trade ministry said Monday.

Malaysia posted a surplus of RM4.05 billion in July, down one percent from RM4.09 billion in June, the International Trade and Industry ministry (Miti) said in a statement.

This marks Malaysia's 57th consecutive monthly surplus since November 1997.

Miti said total exports rose 6.7 percent from higher exports of electrical and electronic products, wood products, liquefied natural gas, transport equipment, chemical and chemical products, machinery, appliances and parts, as well as palm oil.

"Total exports of goods in July 2002 was RM31 billion ringgit, up by 6.7 percent from June 2002, due to increases in exports of all major products... together, these products contributed 72.2 percent Malaysia's total exports," it said in a statement.

Higher than expected

Economists said the July trade surplus was within expectations but the export figure was higher than expected.

"Generally, I think the numbers look good. It shows the trade picture continues to improve... exports have strengthened more than expected," IDEAGlobal.com regional economist Paul Schymyck said.

Electrical and electronic rose 5.1 percent from June at RM7.4 billion, remaining the top revenue earner and accounting for 56.2 percent of total exports, while crude petroleum dropped 5.2 percent to RM970 million in the same month.

Total imports rose 7.9 percent from June to RM26.9 billion as an increase in intermediate goods and consumption goods offset a decline in capital goods.

Countries from the Association of Southeast Asian Nations, the United States, the European Union, Japan, China and Hong Kong remained the top six export destinations, jointly accounting for 82.4 percent of total exports in July.

The major markets that showed increases in exports over the previous month were the US, Japan and China.

Exports to the US rose 11.9 percent month-on-month to RM7.1 billion in July, recording the highest monthly value recorded since September 2000, due mainly to electrical and electronic exports, which made up 78.4 percent of total exports to US, rose 11 percent.

Recovery gained momentum

For the first half of the year, Malaysia posted a trade surplus of RM26.7 billion, with total exports amounting to RM200.1 billion and imports totalling RM173.5 billion.

Last year, Malaysia's trade surplus fell 13.1 percent to RM53.73 billion due to the effects of the US recession.

The country's recovery gained momentum in the second quarter to June this year with the economy growing a stronger-than-expected 3.8 percent from a year earlier.

The government has forecast the economy to recover to grow between three and five percent this year because of a pick up in external demand, domestic consumption and investment.



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