Malaysia's trade surplus increased by 15.3% from RM87.47 billion in the same period in 2018 to RM1.08 billion from January to September.

Analysts said that this was the largest trade surplus in January-September in nearly a decade.

However, they warned that the fourth quarter's trade performance would be very fragile after the country's exports experienced the biggest monthly decline since October 2016.

Commenting on the latest trade figures released by the Ministry of International Trade and Industry today, MIDF Research said: "Export contraction has fallen to its lowest level in almost three years.

MIDF Research said in September that exports contracted by 6.8% year-on-year, the largest decline since October 2016.

The company said: "The second consecutive month of negative growth is due to weak performance in all major industries," he added, adding that higher base effects, especially the October 2018 base effect, will affect the fourth quarter of 2019. Overall performance.

It added: "Nevertheless, we expect commodity-based sector products, especially LNG exports, to offset the adverse effects of the trade war in the second half of 2019."

The ministry reported that Malaysia ’s total trade in September fell by 2.7% year-on-year to RM147.07 billion. This is due to reduced trade with Singapore, Hong Kong, Taiwan, Australia, Thailand and the Netherlands.

However, trade with China, India, South Korea, the United States and Saudi Arabia has increased.

The ministry said that the trade surplus in September was RM8.34 billion, a decrease of 46.5% from September 2018. This is a trade surplus of 263 consecutive months since November 1997.

MIDF Research said that in the first nine months of this year, the average annual growth rate of exports was 1.1%.

In terms of absolute value, the monthly average recorded in 2019 to date is RM80.9 billion, which is still lower than the RM83.7 billion in 2018.

"Due to the high base effect, we expect export growth to decline further in October 2019. In addition, the continued decline in capital and intermediate product imports indicates a poor outlook for future exports.

It added: "With the rise of protectionism and the loss of momentum in some major economies, especially in Europe, and global trade faltering, we do not expect a major comeback in the second half of 2019."

(Source by NST)