Malaysia's exports contracted for the fifth consecutive month in June by dropping 6.9 percent on year-on-year basis, due to weaker demand from its major trading partners.
Total exports in June amounted to 56.7 billion ringgit (17.45 billion U.S. dollars), compared with 60.97 billion ringgit (18.77 billion U.S. dollars) in the corresponding period in 2012, according to the trade data released by the International Trade and Industry Ministry on Monday.
Decrease in exports was recorded mainly to China, South Korea, Japan and the United States due to reduced exports of E&E products mainly electronic integrated circuits, optical and scientific equipment and palm oil.
Exports to China, Malaysia's largest trading partner, declined sharply by 20.5 percent year-on-year. China's economy eased to a 7. 5 percent growth in the second quarter from 7.7 percent in the first three months, according to the National Bureau of Statistics (NBS).
Malaysia's imports in June increased by 1.3 percent to 52.43 billion ringgit (16.14 billion U.S. dollars) compared to June 2012. The total trade stood a 109.18 billion ringgit (33.61 billion U.S. dollars), a 3.2 percent decline, while Malaysia enjoyed a 4.3 billion ringgit (1.32 U.S. billion dollars) trade surplus.
For the first half of 2013, Malaysia's total trade was valued at 651.05 billion ringgit (200.42 U.S. dollars), sustained the same level compared with the first six months in 2012. Exports declined by 3.8 percent to 337.82 billion ringgit (103.99 U.S. dollars) while imports expanded by 4.4 percent to 313.23 billion ringgit (96.42 billion U.S. dollars). Trade surplus shrank to 24. 58 billion ringgit (7.57 billion U.S. dollars), less than half of the 51.09 billion ringgit (15.73 billion U.S. dollars) recorded in the corresponding period last year.
Although central bank and government officials insisted that a strong domestic demand will continue to drive economic growth, some analysts predict that the country would fall short of the 5 percent growth target this year.
Rating agency Fitch cut Malaysia's outlook to "negative" last week, citing its rising debt levels and lack of budgetary reform.