Imports to Malaysia hit a record monthly high in June with the country on track to surpass its full-year gross domestic product (GDP) growth target for 2004, Prime Minister Abdullah Ahmad Badawi said today.

Data from the trade ministry showed that imports in June surged 38.4 percent year-on-year and were up 9.6 percent from May to hit a record RM34.66 billion.

The rise came as the country bought more capital and intermediate goods to "sustain manufacturing activities to meet external demand," the ministry said.

Increased purchases of intermediate goods is usually reflected in a pickup in exports two or three months later.

Exports in June rose 22.2 percent year-on-year and were up 3.2 percent from May to reach RM39.75 billion. The increase was fueled by rising demand for electrical and electronic products, wood products, and optical and scientific equipment, the ministry said in a statement.

June's trade surplus reached RM5.09 billion, down from a revised RM6.9 billion in May but up from RM7.48 billion a year ago, the ministry said. It marked the 80th consecutive monthly trade surplus since November 1997.

Resilient economy

For the first half of the year, Malaysia's trade surplus dipped 9.4 percent from a year earlier to RM37.46 billion.

Abdullah, who is also finance minister, said the Malaysian economy has become more resilient and competitive after recording its strongest GDP growth in more than three years in the three months to March.

"Growth in the first quarter of this year was 7.6 percent and the latest indicators suggest that we stand a good chance of achieving, if not surpassing growth forecasts for 2004," he said when opening a two-day economics conference.

The goverment is projecting the economy to grow between 6.0 to 6.5 percent in 2004.

Analysts said June quarter GDP data, which would be released on Aug 25, was expected to show the economy growing above seven percent on an annualised basis.

But the rate of growth was likely to ease in the second half of the year due to rising interest rates, China's economic cooling and high oil prices.

"It's not a dip, it's a slowdown but there is still a possibility of surpassing the government forecast due to faster-than-expected growth in the first half of the year," said Azrul Azwar, economist with MIDF Bhd.

Higher exports

For June, the trade ministry said exports of all major product groups increased led by electrical and electronic products which rose 15 percent year-on-year to RM20.45 billion. They made up 51.5 percent of total exports.

More than 80 percent of exports in the month were absorbed by the Association of Southeast Asian Nations (Asean), the United States, the European Union, Japan, China and Hong Kong.

Exports to the US rose 5.7 percent from May to RM7.72 billion, exports to Asean grew seven percent month-on-month to RM9.77 billion, the EU was up 12 percent to RM4.82 billion, Japan up 9.1 percent to RM4.21 billion, Hong Kong grew 17.9 percent to RM2.7 billion but China dipped 2.3 percent to RM2.62 billion due to lower crude oil exports.