Growth at 10.7% to RM51.85bil beats economists’ forecast of 5%

PETALING JAYA: The country's exports grew 10.7% to RM51.85bil in February compared with a year ago largely due to higher exports of electrical and electronic (E&E) products and commodities.

Exports growth was revised to 4.6% in January.

The growth in February beat a 5% median estimate in a Bloomberg economists' forecast.

Imports expanded by 11.5% to RM39.21bil, resulting in a total trade of RM91.06bil, an increase of 11% from the corresponding month in 2010.

However, on a month-on-month basis, exports decreased by 5.5% while imports contracted by 12.6% and total trade declined by 8.7%.

Kenanga Investment Bank Bhd economist Wan Suhaimie Saidi told StarBiz that the pace of growth in exports would not sustain due to external headwinds.

“We're not out of the woods yet, the exports-driven economy is still susceptible to a slowdown due to a protracted increase in crude oil prices and the anticipated temporary drop in demand from Japan due to the earthquake,” he added.

Wan Suhaimie said exports growth would only come in the second-half of the year with an increase in demand from Japan as the government begin reconstruction of devastated parts in north-east Honshu coasts.

ECM Libra Capital Sdn Bhd economist Michelle Chia said in an e-mail reply that the Chinese New Year period had likely put a dent on February exports.

“In isolation, it may seem that exports cratered in February. However, exports typically soften during the Chinese New Year month, which fell earlier this year than in 2010,” she said, adding that this distortion likely pulled exports forward to January.

Chia said one way of bypassing the Chinese New Year distortion was to look at year-to-date year-on-year export growth, which increased 7.5%.

She said the country's export growth had been in a bottoming trend and there were expectations for exports to grow steadily this year.

“Nonetheless, the fallout from Japan Malaysia's third-largest export destination and a stronger ringgit may put pressure on exports, especially manufactured goods,” Chia pointed out.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said in a Statistics Department preliminary release yesterday that China, Singapore, Japan, the United States and Hong Kong were the top five export destinations, accounting for 49.4% of Malaysia's total exports in February.

He said exports to Asean was valued at RM12.36bil, accounting for 23.8% of the country's total exports in February but declined marginally from a year ago due to lower exports of crude petroleum, E&E products, petroleum products as well as iron and steel products.