Kuala Lumpur: Malaysia's January exports are expected to suffer their steepest contraction in nearly thirty years, as dying demand hits an economy facing its first recession in eight years.
The Southeast Asian country's exports have dropped 24.8 per cent in January from a year earlier, according to a Reuters poll of 10 economists, the biggest drop in nearly thirty years for which data is available.
In December, exports fell 14.9 per cent.
"Exports are likely to weaken further in January in line with the pattern around the region reflecting the sharp falloff in global demand," said Action Economics' David Cohen.
"There's not much they can do about that. Perhaps the government will implement some fiscal stimulus to boost the economy but exports will be dependent on the bottoming out in global demand."
January's drop in exports would be the biggest fall since February 1981, when they fell 21 per cent.
Export-dependent Asian economies are hit by fast fading demand due to the financial crisis, and on Monday India and Indonesia released data showing sharp falls in January exports.
Malaysia is usually one of the last countries in Asia to release monthly trade data, and often other countries' figures give an early indication of where Malaysian exports are headed.
In January, Indonesia's exports dropped 36 per cent from a year ago, the biggest fall in 22 years, while Indian exports fell 15.9 per cent.
Malaysian imports, used in many of the country's goods that are subsequently exported, are expected to fall 28.5 per cent from a year earlier, according to the poll.
In December, imports fell 23.1 per cent.
The trade surplus is seen at 9.3 billion ringgit ($2.5 billion) compared to 11.67 billion in December.
The central bank cut interest rates three times in a row since November last year by a total of 1.5 per centage points and investors are looking for details of a fiscal stimulus package set to be announced on March 10.
Source : The Financial Express.