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Saturday, April 11, 2009

External Trade Still Low

Slower pace of declines…

 Exports contracted by a smaller quantum of 15.9% YoY in Feb ’09 (Jan
’09: -27.8% YoY). Imports also contracted at a slower pace of 27.3%
YoY (Jan ’09: -30.4% YoY). The trade surplus widened to RM12b (Jan
’09: +RM8.1b). YTD, exports and imports fell 22.2% YoY (Jan-Feb ’08:
+12.3% YoY) and 28.9% YoY (Jan-Feb ’08: +9% YoY) respectively, while
trade surplus broadened to RM20.1b (Jan-Feb ’08: +RM18.8b).

 However, export growth should remain negative for most of this year,
taking cue from indicators like intermediate goods imports, global chip
sales and index of leading economic indicators that point to underlying
weakness in the economy and key industry. Nonetheless, we note
recent improvements in data coming out of key economies like US and
China, which suggest the aggressive monetary, financial and fiscal
measures are taking effect.

 Therefore, we are maintaining our forecasts of exports and imports
falling by 16% (2008: +9.6%) and 13.2% (2008: +3.3%) this year, to result
in a narrower trade surplus of RM104.7b (2008: +RM142b). This will be
followed by rebounds of 6.4% in exports, 6.3% in imports and a
RM112.3b in trade surplus in 2010.

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