It was the fastest period trade breached the one trillion mark, two months earlier than the normal trend, MITI said. (Pic by Bloomberg)

 

KUALA LUMPUR: Malaysia's total trade has surpassed RM1 trillion in just seven months, the fastest period to breach the milestone.

The total value stood at RM1.01 trillion in the January-July period, up 22.7 per cent from the corresponding period in 2016.

"This was the fastest period trade breached the one trillion mark, two months earlier than the normal trend," the International Trade and Industry Ministry said in a statement yesterday.

Exports in July maintained its steady growth momentum recording a value of RM78.62 billion, rising by 30.9 per cent compared with a year ago. It is the third straight month growth for both exports and imports.

In July, imports was higher by 21.8 per cent to RM70.59 billion and total trade expanded by 26.4 per cent to RM149.21 billion.

On a month-on-month basis, total trade, exports and imports in July were higher by 9.5 per cent, 7.6 per cent and 11.7 per cent respectively.

Alliance Bank said the robust double-digit exports growth was partly attributed to low-base effect, as the Hari Raya festive holidays fell on the month of July in the previous year.

It noted that the August Nikkei manufacturing PMI rebounded back into positive territory to 50.4, after improving from a record low of 46.9 in June.

“This may indicate a steady growth in the manufacturing sector with growth normalising towards the end of 2017.”

Leading indicators index fell in June, which points to slower GDP expansion in the near term.

The research house expects domestic demand to be the main driver of growth in 2017 with the external trade sector along with the manufacturing and services sector also contributing positively.

Julia Goh of UOB Bank said Malaysia’s export performance outperformed the region in July: Japan (13.4 per cent), China (6.0 per cent), South Korea (19.5 per cent), Singapore (12.4 per cent), and Thailand (10.5 per cent).

“Double-digit export growth should sustain until October before the low base effect recedes thereafter.”

Given the robust export performance, she said full year export growth could average 15-18 per cent this year.

Downside risks to watch include emerging US-China trade frictions and North Korea geopolitical risks.

Meanwhile, the ministry noted that exports of manufactured goods led the growth momentum, recording a 32.6 per cent year-on-year growth, mostly due to electrical and electronic (E&E) exports which continued to register a double-digit growth for the seventh straight month.

Mining goods demand also grew driven by increased exports of liquefied natural gas, underpinned by both higher average unit value (AUV) and volume.

Exports of agriculture goods which increased by 14.8 per cent was steered by higher exports of palm oil and palm oil-based agriculture products especially palm oil, as a result of higher AUV and volume.

In terms of markets, exports to Asean countries recorded double digit growth (33.8 per cent), China (28.8 per cent), European Union (34.5 per cent) and Japan (25.5 per cent).