Regarding Malaysia Booming Trade

• pica said...
  What do you think of the Star's front page today?
  
  It's from http://blogs.ft.com/beyond-brics/2010/05/04/export-data-from-malaysia-shows-export-led-recovery-accelerating/
  
  Was wondering if we're really on as solid a footing as they seem to think.

Firstly, I need to declare to you that I did not study economics at all and whatever comments and views you read from me could certainly be flawed. Ok? :D

The said article..

• Malaysia’s trade booms as it rides Asian economic recovery
  May 4, 2010 3:23pm
  by Kevin Brown
  
  Malaysia is roaring out of recession even faster than expected, with March trade figures published today beating forecasts by a wide margin. The numbers suggest east Asia’s post-crisis recovery is moving ahead even faster than expected. According to the government’s announcement, exports rose 36.4 per cent year-on-year(compared with forecasts of around 20 per cent), and imports by 45.3 per cent (forecasts of around 30 per cent).
  
  Given Malaysia’s high exposure to trade, the numbers bode well for first quarter gross domestic product growth, which economists now see reaching up to 10 per cent and more, compared with a 6.2 per cent decline in the first three months of last year, at the height of the global crisis.The government said in March that the economy had grown 4.5 per cent in the fourth quarter compared with a year earlier.....

Well let me attempt to understand what it says..

The exports rose 36.4% is on a year-year comparison.

It's impressive but I would personally note that this is a year-to-year comparison and that the 2009 numbers were a total-washout numbers - ie. those numbers were recession numbers.

Well it certainly looks like Malaysia is out of recession.

• Robert Prior-Wandesforde, senior Asian economist at HSBC, told Reuters:
  
  It looks to us as though exports in Q1 as a whole was up strongly probably by 6.5 per cent on a seasonally-adjusted basis, which in turn bodes well for GDP. GDP will be something close to 11 per cent in Q1 and for the year as a whole it would be 7.3 per cent. The picture is one of rampant trade growth. A lot of it was intra Asia exports but exports to the US have picked up very strongly too. This is a V-shaped recovery, which in our view is sustainable and will lead to significant further upside in terms of GDP growth.

Alright.

Now since it's on a year-to-year comparison, I would guess the numbers might not be accurate or rather the numbers comparisons might not be really that conclusive because the risk is that it could be a low base comparison.

So I would ask myself, what are the Feb export numbers? what are the Jan export numbers? What are the export numbers before 2009.

The best website to use is BNM website.

And here is the link to the export numbers: http://www.bnm.gov.my/files/publication/msb/2010/3/pdf/7.4.pdf

And if I would compile the numbers into a very simple table, this is what I am looking at.

Malaysia recorded total exports of rm 59.44 Billion for the month of March 2010.

How?

How would you want to interpret those numbers?

Sorry I do not wish to do so since I am not qualified.. :D

On our department of statistics website, the following article is published.

Preliminary Release of Malaysia External Trade Statistics March 2010 (Updated: 04/05/2010)

• The Minister of International Trade and Industry (MITI), YB Dato’ Sri Mustapa Mohamed announced that total exports recorded a new high for the month of March, amounting to RM59.44 billion, a surge of 36.4% compared with the corresponding month in 2009. This is also the highest post crisis monthly exports recorded since September 2008. Imports rose 45.3% to RM45.09 billion.

Yes highest since Sep 2008. On Sep 2008, Malaysia export numbers were rm 62.3 Billion.

• Total trade in March 2010 expanded by 40.1% to RM104.54 billion compared with March 2009. Trade surplus was valued at RM14.35 billion, making it the 149th consecutive month of trade surplus since November 1997.
  
  Compared with February 2010, exports increased by 26.9% while imports rose 28.2%. Consequently, total trade rose 27.5%.

Yes compared with Feb 2010, the increase in exports were impressive.

However, as you can see from BNM stats, Feb is usually our weakest month.

• During the first quarter of 2010, total exports registered a marginal decrease of 0.2% to RM158.73 billion compared with the fourth quarter of last year. Imports contracted 5.4% to RM119.78 billion. Total trade decreased by 2.5% to RM278.51 billion while trade surplus increased by 20.1% to RM38.95 billion.....

Marginal decrease when compared to 4th quarter the previos year.

• Major export products:
  Electrical and electronic products valued at RM22.31 billion or 37.5% of total exports;
  Palm oil (RM4.42 billion or 7.4% of total exports);
  Liquefied natural gas (RM3.99 billion or 6.7% of total exports);
  Chemicals and chemical products (RM3.91 billion or 6.6% of total exports);
  Crude petroleum (RM3.02 billion or 5.1% of total exports);
  Refined petroleum products (RM2.16 billion or 3.6% of total exports);
  Transport equipment (RM2.14 billion or 3.6% of total exports);
  Machinery, appliances and parts (RM2.12 billion or 3.6% of total exports);
  Optical and scientific equipment (RM1.60 billion or 2.7% of total exports); and
  Manufactures of metal (RM1.59 billion or 2.7% of total exports).
  
  The People’s Republic of China (PRC), Singapore, Japan, the United States of America (USA) and Thailand were the top five export destinations, accounting for 51.8% of Malaysia’s total exports.

Electrical and electronic products.. that's our bread and butter. :D

Our top five export destination.. China, Spore, Japan, USA and Thailand and they account for 51.8% of our total exports.

• Exports to the PRC rose to a new monthly high of RM7.98 billion, an increase of 51.2% from March 2009. This was mainly contributed by higher exports of E&E products, palm oil, chemicals and chemical products, crude and rubber products, crude petroleum as well as optical and scientific equipment. Exports to the PRC in March 2010 rose 40.3% compared with February 2010.

Ah.. China a key country!

But what about EU? With all the issue over there, I am sure many are worried.

• Exports to the European Union (EU) increased by 31.5% to RM6.09 billion from March 2009. This was mainly due to higher exports of E&E products, crude and rubber products as well as chemicals and chemical products. Compared with February 2010, exports to the EU rose 18.7%.

Here is the table.

And last but not least..

• Exports to the USA amounted to RM5.77 billion, an increase of 26.5% from March 2009. This was mainly attributed to higher exports of E&E products, machinery, appliances and parts, palm oil and crude petroleum. Compared with February 2010, exports to the USA expanded by 35.7%.

And here is the article on our front page Star: More than 10% economic expansion in first quarter for the first time in 10 years

• KUALA LUMPUR: The country’s economy is likely to register growth of more than 10% in the first three months of the year – an achievement not seen in the last 10 years.
  
  The latest economic indicators show a positive trend. Exports in March grew by 36.4% beating the market forecast of 22.4%. Imports rose by 45.3% (forecasts were around 30%).
  
  The London-based Financial Times says: “Given Malaysia’s high exposure to trade, the numbers bode well for first quarter gross domestic product growth”.
  
  Analysts from major banks, local and international, put the first three months’ growth at between 9.8% and 12% and they expect the trend to continue for the second quarter making it a “very good first half of the year for Malaysia.”
  
  As a result, the analysts are also revising upwards their estimates for Malaysia’s GDP growth forecast for the year. Banks are now forecasting the annual GDP to grow by between 8% and 11% as compared to Bank Negara’s earlier estimate of between 4.5% and 5%.
  
  “Given the recent developments in both domestic and external conditions, we are confident our 2010 forecast of 8% should be achievable,” said Ambank group chief economist Manokaran Mottain in his Economic update released here yesterday.
  
  He also noted that besides the surge in exports, there was a marked improvement in private sector spending, especially by households. Big ticket items such as cars have seen increased sales.
  
  According to the Malaysian Automotive Association, auto sales surged 25% year-on-year in March to 56,139 units, up from 44,896 in the same month last year.
  
  HSBC Global Research economist Robert Prior-Wandesforde in his report entitled “From bust to boom - double-digit GDP growth in Singapore and Malaysia?” noted that the recovery of the economy came three months faster than expected.
  
  While the Financial Times said, “Malaysia is roaring out of recession even faster than expected”.
  
  The country’s key economic indicators including the export figures were released on Tuesday.
  
  Malaysia’s exports recorded a new high for the month of March, amounting to RM59.44bil, registering a significant growth of 36.4% year-on-year. This was also the highest post-crisis monthly exports recorded since September 2008. Imports rose 45.3% to RM45.09bil.
  
  The increase in exports was largely contributed by increases in exports of electrical and electronic (E&E) products, which surged 31.8%; chemicals and chemical products, (+60.8%); palm oil, (+49.3%); transport equipment, (+188.4%); as well as crude petroleum (+55.8%).