KUALA LUMPUR, July 7 (Xinhua) -- Malaysia's exports in May far exceeded analysts' forecasts, surging 32.5 percent from a year earlier, the strongest since March 2010, government figures showed on Friday.
The surge in May was underpinned by higher exports to all of Malaysia's trading partners especially with China.
Malaysia posted a stronger year-on-year export growth compared to imports for the first time since May 2016, with exports growing by 32.5 percent to 79.4 billion ringgit (18.5 billion U.S. dollars) while imports increased by 30.4 percent to 73.91 billion ringgit, resulting in a trade surplus of 5.49 billion ringgit, Malaysian Ministry of International Trade and Industry (MITI) said in a statement.
All major sectors registered strong double-digit growth, led by manufactured goods which rose 32.7 percent, it said, adding that trade volume in May grew by 31.5 percent year-on-year as almost all trading partners posted growth.
Malaysian trade with China in May increased by 32.3 percent to 25.21 billion ringgit and accounted for 16.4 percent of Malaysia's total trade.
Export to China in May increased by 51.5 percent to 10.73 billion ringgit, due to greater demand for electrical and electronic (E&E) products, petroleum products, chemicals and chemical products as well as rubber products.
Economists believe trade outlook in the coming months remains promising, albeit in a moderate manner. The positive outlook has also prompted some economists to upgrade their forecasts.
United Overseas Bank economist Julia Goh told Xinhua that Malaysia's export strength in May is in tandem with the region's export performance.
She, however, expects moderation in the second half amid ebbing momentum in global manufacturing, slower producer price inflation, and lower commodity prices.
"The global manufacturing outlook remains positive but peaking from multi-year highs," she said while expecting further support from E&E exports amid cyclical strength as new orders maintain steady pick-up on the back of robust global semiconductor sales showing double-digit growth for six straight months.
Due to the strong export expansion of 23.3 percent in the first five months, CIMB Investment Bank's economics research head Michelle Chia is revising her full-year gross export forecast to 15.3 percent, from 7.3 percent earlier.
But she sees the growth in Malaysia's exports to China nearing an inflection point, saying the country should see moderating export growth towards the end of 2017.
"We think the moderation will take place for these reasons, reversal of base effects, waning policy stimulus, greater regulatory scrutiny over asset prices and financial leverage," she added.
