KUALA LUMPUR: Exports jumped a strong 12.4 per cent year-on-year in August, making it the highest export month so far this year.
Imports rose by 14.1 per cent while total trade expanded by 13.2 per cent to RM118.69 billion, surprising the market with a higher-than-expected trade surplus.
According to the International Trade and Industry Ministry (Miti), the expansion in exports were contributed mainly by higher exports of refined petroleum products; electrical and electronic (E&E) products, primarily electronic integrated circuits; manufactures of metal as well as chemicals and chemical products.
Manufactured goods grew by 10.6 per cent on the heels of mi-ning goods, which increased by 31.6 per cent, while exports of agricultural goods were lower by 8.9 per cent.
Credit Suisse economist Santitarn Sathirathai said both export and import growth surprised the market significantly.
"The improvement in trade surplus is also in line with our view that the worst of trade balance deterioration is behind us and that Malaysia's current account surplus will start to stabilise," he said.
The pick-up, he added, was quite broad-based in terms of product mix - product geared to pick-up in global cycle such as electronics and chemicals performed well while there was a surge in refined petroleum products.
CIMB Investment Bank chief economist Lee Heng Guie said August exports expanded for the second month, partly aided by a low base a year ago and some recovery in the electronic exports.
The monthly trade surplus growth, he said, supports the research house's outlook that the current account surplus would improve to RM15 billion in the second half of the year.
"This potentially will sooth investors' nerves over the possibility of a current account deficit," he added.
July-August exports bode well for the economy and current account balance.
"Assuming net export turn-around in the second half, we are looking at better gross domestic product growth of 5.1 per cent in the second half versus 4.2 per cent in the first half of this year, potentially bringing full-year growth to 4.7 per cent."
Meanwhile, Miti said August exports to China grew by 21.3 per cent while exports to the European Union increased by 20.4 per cent.
Exports to Japan, however, contracted by 11.3 per cent to RM6.26 billion compared with a year ago, while exports to the US was lower by 4.2 per cent.
Malaysia's total trade was valued at RM888.33 billion for January to August this year, an increase of 2.2 per cent compared with the same period last year.
Exports were lower by 0.8 per cent to RM461.44 billion while imports expanded by 5.8 per cent to RM426.89 billion.
Trade surplus of RM34.55 billion was recorded for the period.