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Latest News
October Exports Expected To Drop
News From : DagangHalal.com (12/2/2010)

StanChart sees first year-on-year fall after 10 straight months of expansion

PETALING JAYA: Malaysia's export data for the month of October, which is expected to be released tomorrow, is likely to show an average decline of 0.9% year-on-year and also a slowdown from the month before, early estimates show.

Forecasts of 14 economists compiled by Reuters revealed that the average exports for October would decline 0.9% compared with a 6.9% year-on-year growth in September.

The decline was attributed to the lower base effect, which should not be too worrying, they said. Exports in October 2009 hit RM54.3bil, the second highest for that year.

A poll of 13 economists by Bloomberg showed that median exports for October would decline 1.8% versus a 6.9% year-on-year growth in September.

Standard Chartered Bank (StanChart) in its report said it was expecting to see the first year-on-year contraction for Malaysian exports after 10 straight months of expansion since December 2009.

While an unfavourable base effect certainly played a part in the poor export performance, weakness in demand from key export destinations would also be a factor, especially weaker demand from China which is Malaysia's top export destination outside Asean, it said.

StanChart said that in line with the weaker export performance, it believed the growth of imports would also ease although resilient domestic demand should still keep imports growth up.

Even as import growth clearly outstrips that of exports, Malaysia is still expected to record a trade surplus for October, and it may even turn out to be wider at RM8bil from RM7bil in September, it said.

Going forward, one economist said the weaker exports could have an impact on Malaysia's gross domestic product (GDP) in the fourth quarter of the year.

Lower exports are likely to be a lug on GDP but this could be offset by better domestic demand during the period, he said.

Last month, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said Malaysia was still capable of achieving GDP growth of 6% to 7% for 2010, supported mainly by domestic demand.

Malaysia's economic growth slowed to 5.3% in the third quarter compared with 8.9% in the second quarter largely on slowing external demand. For the third quarter, domestic spending increased by 5% helped by a sustained expansion in both private consumption and capital spending.

Also in a report last month, Malaysia External Trade Development Corp chief executive officer Datuk Noharuddin Noha said he expected better export growth in October and November compared with September due to the coming festive season in Western countries

- The Star Online

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