KUALA
LUMPUR—Malaysia's exports contracted for
a second successive month in April, threatening the country's growth prospects,
though economists say robust domestic demand will likely give the central bank
room to hold the benchmark interest rate steady.
Other
Southeast Asian countries like Thailand, Taiwan and South Korea have also
reported poor shipments as slower growth in advanced nations and worries over
euro-zone sovereign debt have squeezed global demand.
Malaysia's
exports fell 0.1% in April from a year earlier compared with the median
forecast for a 1.6% expansion in a Dow Jones Newswires poll of 13 economists.
In March, exports had declined 0.1% year-on-year as well.
"The
back-to-back decline in exports reflects the downturn in the electronics sector
as well as in palm oil as the slowdown in China and Europe crimped
demand," said Bank Islam Malaysia Bhd. economist Azrul Azwar Ahmad
Tajudin.
Exports
totaled 57.74 billion ringgit ($18.17 billion) in April compared with 57.80
billion ringgit a year earlier, the Ministry of International Trade and
Industry said in a statement Wednesday. Shipments to European Union nations
fell 14% due to weak demand from most of its member nations though exports to
Asean rose 8.9%.
Exports
of electrical and electronic products, which account for about a third of total
exports, declined 6.9% on-year in April to 18.49 billion ringgit while palm oil
exports fell 12% to 4.24 billion ringgit from a year earlier, the ministry
said.
Still,
economists say Malaysia's central bank will likely keep the overnight policy
rate at 3% unless the crisis in Europe worsens and weighs on the domestic
economy. Bank Negara Malaysia is scheduled to meet July 5 for its fourth policy
meeting this year.
"At
the moment we do not see any rate reduction unless there is a severe
compression in domestic demand, slowdown in lending or money supply
growth," said TA Securities economist Patricia Oh.
The
ministry said imports in April grew 7.4% to 50.23 billion ringgit from the same
month a year earlier. That compares with the polled economists' expected rise
of 5%.
In
February, Minister of International Trade and Industry Mustapa Mohamed said
export growth was expected to slow to between 5% and 6% in 2012 after growing
8.7% in 2011.
The
trade surplus for April was 7.51 billion ringgit, narrowing from March's 10.45
billion ringgit.
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