Economists: Malaysia Nov export numbers won't impress

By Rupa Damodaranrupabanerji@nstp.com.my

MALAYSIAN exports in November are expected to falter further with the deepening global crisis, as exports to major markets across the globe soften significantly.According to a Business Times poll, economists expect exports to contract by an average of 6.46 per cent year-on-year from a 2.6 per cent decline in October, imports to decline by 4.6 per cent year-on-year and trade balance to average RM8.82 billion.

The International Trade and Industry Ministry will release the data tomorrow. DBS Bank economist Irvin Seah said the drastic plunge in commodity prices has taken the "wind out of the sail" for Malaysia's export performance."The support from commodity prices has dissipated and the drag from the depressed global demand is beginning to show.

"Given the dire global economic conditions, consumers and businesses have cut back on their expenditure and that will surely weigh on the growth outlook for Malaysia's export-oriented sectors and on a broader basis, the whole economy," he added.He expects the gross domestic product growth for this year to soften further to 3.3 per cent from 5.5 per cent in 2008, while the manufacturing sector will contract by 1.9 per cent in 2009, from a 3.4 per cent in 2008.Malaysia will join the list of Asian countries with exceptionally poor export data in November, remarked Gundy Cahyadi of IDEAglobal.

"We expect this poor export performance to sustain for the best part of the first half. It is also a concern that demand within Asia has apparently moderated, and further shrinkage in exports would only add pressure to the government to react decisively on the economy," he said.Patricia Oh, from TA Enterprise, said the deterioration in the ringgit against the US dollar (which averaged at RM3.618 per US$ for November) was supposed to create favourable terms of trade.

"However, the sluggish worldwide demand for goods and services has offset the overall preferable exports position for Malaysia," she added.Oh said the electrical and electronics component would drive exports downward as electrical and electronics (E&E) manufacturing companies unanimously expect weaker orders.

"Not only does the exchange rate make imported products expensive for Malaysians, but imports of intermediate and capital goods could have dampened as manufacturing orders likely declined following the generally weak product market both locally and internationally," she added.