Malaysia's Export Growth Slows as Risks to Global Economic Rebound Emerge
Malaysia’s exports rose at the slowest pace in seven months as risks to the global economic recovery emerge with Europe’s sovereign-debt crisis and slowing growth in the U.S.
Overseas shipments climbed 17.2 percent in June from a year earlier to 52.8 billion ringgit ($16.7 billion) after gaining a revised 21.8 percent in May, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 13 economists was for a 17.3 percent increase.
Growth has slowed in the U.S. and China, among Malaysia’s biggest markets, and governments in Europe are implementing austerity measures to reduce budget deficits, threatening demand for Asian goods including Unisem (M) Bhd. computer chips. Southeast Asia’s third-largest economy may expand at a slower pace in the second half as exports cool, giving the central bank scope to stop raising interest rates.
“With this growing issue of concern about the external condition I think Bank Negara Malaysia is likely to pause on its interest rate hikes,” Suhaimi Ilias, an economist at Maybank Investment Bank Bhd., said before the report “The recent indicators coming up from America and China, especially with regards to the manufacturing industries, seems to suggest that this key driver of manufacturing exports elsewhere is kind of moderating.”
China’s manufacturing grew at the slowest pace in 17 months in July as the government clamped down on property speculation and investment in energy-intensive and polluting factories, according to a Purchasing Managers’ Index released Aug. 1. The U.S. Institute for Supply Management’s manufacturing gauge fell to 55.5 in July from 56.2 a month earlier.
Malaysia’s central bank Governor Zeti Akhtar Aziz has raised the benchmark interest rate to 2.75 percent this year from a record low as economic growth surged to the fastest pace in at least a decade in the first quarter.
The Malaysian ringgit is Asia’s biggest gainer against the U.S. dollar this year, climbing 8.4 percent.
The country’s imports rose 30.1 percent in June from a year earlier. The trade surplus narrowed to 6.04 billion ringgit from 8.1 billion ringgit in May.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
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