Malaysia’s trade surplus narrows as regional exports improve

KUALA LUMPUR – Commenting on the release of new trade figures by Malaysia, ANZ Bank points to Malaysia’s large fiscal deficit, saying that the ongoing narrowing in Malaysia’s trade balance is a concern and one that international capital will not view favourably.  ANZ says that while the July trade balance remained in surplus, the market reacted negatively because the surplus was lower than forecast.

“Fortunately, we believe the narrowing of the Malaysian trade surplus is in the process of basing, and given recent credible policies to stabilise the fiscal deficit, Malaysia is making progress in insulating itself from the adverse sentiment currently plaguing India and Indonesia,” ANZ says.

“From a regional perspective, the increase in exports of electrical and electronics exports to China and the US, plus an increase in shipments to Japan, suggest the basing in China and the recovery in the US and Japan may be starting to provide firmer support to regional production and exports.  A key feature of the old world’s recovery to date is that the global trade cycle is lagging it.” www.live.anz.com (ATI).