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Economists: Reopening of more economic sectors will improve Malaysia’s external trade performance

Economists: Reopening of more economic sectors will improve Malaysia’s external trade performance

27 Aug 2021

The reopening of more economic sectors in the upcoming months is expected to gradually result in a better performance for the country’s external trade, an economist said.

Bank Islam Malaysia chief economist Mohd Afzanizam Abdul Rashid said the latest export print showed that the external demand recovery had been quite tentative.

Malaysia’s trade performance continued its growth momentum in July 2021 with total trade increasing by 13 per cent year-on-year (y-o-y) to RM180.96 billion.

The Ministry of International Trade and Industry said that the exports grew by five per cent to RM97.32 billion while imports rose by 24 per cent y-o-y to RM83.64 billion.

On a month-on-month (m-o-m) basis, it said imports increased by 0.5 per cent while trade, exports and trade surplus declined by 4.1 per cent, 7.7 per cent and 38.5 per cent, respectively.

“We could see the reimposition of movement control order commencing June has affected the export-oriented industries given the limited operational capacity allowed during this period.

“Hence, with the vaccination rate going extremely well and more economic sectors being reopened, external trade could perform better in the months to come “ he told Bernama.

Meanwhile, Prof Emeritus Barjoyai Bardai of Universiti Tun Abdul Razak (UniRazak) opined that imports were increasing as consumer demand had risen and there was a possibility of stockpiling activities by the local traders.

He said the growth rate of Malaysia’s external trade for the quarter and first half-year period was seen to be improving, but the trade performance on a m-o-m basis was rather worrying.

“We can see that our export performance increased until the month of April, then declined in May before attempting to recover in June but was subsequently lower in July.

“The opening of more economic sectors will determine the value of our foreign trade in the future,” he said.

Source: Bernama