Malaysia's October exports grew more than twice as much as expected, helped by demand from key markets for electrical and electronic products and by the weak ringgit. The country's exports have picked up in the second half, after drops in commodity shipments following the global slide in oil and palm oil prices and a slowdown in China.
In ringgit terms, October's exports increased 16.7 percent from a year ago, government data showed, the highest growth since April 2014. Economists polled by Reuters forecast 7.9 percent growth. Malaysia reports trade data in ringgit, which has lost about 17 percent against the US dollar this year, making it Asia's worst-performing currency. Irvin Seah, economist at DBS in Singapore, said he would take the October growth "with a pinch of salt because of the currency valuation effect" which naturally boosts the data.
"We are not seeing strong improvement in global demand," he added. Wellian Wiranto, economist at OCBC in Singapore, said a jump in shipments of electronics and electrical items "shows some strength in Malaysia's economy". October imports signalled that domestic demand remained weak. They contracted 0.4 percent, less than the poll forecast for a 4.3 percent drop but a sharp contrast to September's 9.6 percent rise.
Malaysia's imports have slumped most months since the government implemented a 6 percent goods and services tax (GST) in April. Annual increases in local private consumption slowed from 8.8 percent in the first quarter to 4.1 percent in July-September. In the third quarter, Malaysia posted its slowest economic growth and smallest current account surplus in over two years. The economy grew 4.7 percent from a year earlier, compared with 4.9 percent in the previous quarter.