KUALA LUMPUR: Malaysia’s monthly external trade figure is expected to continue its volatility influenced by the base and calendar effects as well as the impact of zero per cent Goods and Services Tax (GST) rate on imports.
Maybank Investment Bank Bhd said May 2018’s export and import growth were affected by the high bases in May 2017, growing 32.4 per cent year-on-year (YoY) and 30.2 per cent YoY respectively.
It also noted the unscheduled public holidays on May 9 to 11 was due to the general election.
In June 2017, export and import growth decelerated to 9.9 per cent YoY and 3.7 per cent, which should create low base effect for June 2018’s figures.
“We see imports surging during the ‘consumption tax holiday’ months of June to August 2018 as businesses take advantage of the zerorisation of GST rate to make their purchases before GST is repealed and replaced by Sales and Services Taxes (SST) on September 1, 2018,” it said.
In May, export growth slowed to 3.4 per cent YoY and import growth stalled at 0.1 per cent YoY amid high base in May last year, while trade surplus for May 2018 sustained at 47.1 per cent YoY to RM8.1 billion.
On global trade, the research firm forecast slower external trade growth this year with 6.3 per cent export growth and +3.0 per cent import growth, which would result in RM131 billion trade surplus.
Maybank IB’s forecast is backed by the high base in 2017, firmer average ringgit versus US dollar, higher crude oil price but lower crude palm oil price, and moderating global semiconductor sales growth.
Among the risk to its forecasts is the “trade war” between US and its major trading partners including China, European Union, Canada and Mexico.