KUALA LUMPUR, Malaysia--Malaysia's export growth likely decelerated in September, potentially becoming the second-straight month it slows after an impressive performance recorded in July.
Nonetheless, exports growth is still expected to remain strong on resilience in shipments of electrical and electronics products, according to economists. Moreover, trade performance will continue to be strengthened by strong global demand and the recovery in commodity prices, they added.
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Exports likely rose 20.2% compared with the same period a year ago, according to the median forecast from a poll of seven economists. This is slower than the faster-than-expected 21.5% growth in August and July's blistering 30.9% increase.
Malaysia's electrical and electronics products, which constitute more than a third of the country's total exports, are likely to perform favorably in September given that industry players have been investing actively to improve production capacity, according to Mohd Afzanizam Abdul Rashid, chief economist at Kuala Lumpur-based Bank Islam Malaysia.
"With improving economies of scale, the players should be able to fulfill large order volumes from the customer," he told The Wall Street Journal on Tuesday.
Exports are an important driver of the Malaysian economy. Strong exports of manufactured goods and commodities helped Malaysia's economy expand 5.8% in the second quarter, its fastest pace in more than two years. Third-quarter gross domestic product data will be released in the middle of this month.
Prime Minister Najib Razak announced in his 2018 national budget speech Friday that stronger domestic demand and exports would push up Malaysia's economic growth to between 5.2% and 5.7% in 2017, compared with the country's earlier official estimate of between 4.3% and 4.8%.
Imports in September likely climbed 21.6% from a year ago, according to the poll. Imports increased 22.6% in August from a year earlier, driven by higher imports of intermediate, capital and consumption goods.
Malaysia's trade surplus is expected to narrow to 8.1 billion ringgit ($1.9 billion) from MYR9.87 billion in August, according to the poll.
The official September trade data is due Friday at 0400 GMT.
-- Write to Yantoultra Ngui at firstname.lastname@example.org
(END) Dow Jones Newswires
October 31, 2017 22:54 ET (02:54 GMT)