The base effect is starting to wear off (log annual and monthly changes; seasonally adjusted):
Much of the “growth” that has been seen in trade over the past half a year has been due to the really poor trade performance we saw in early 2013. That artificially boosts growth numbers this year. For a clearer view, take a look at the actual levels (RM ‘000):
Unlike imports, which are clearly trending up, exports has instead shifted up from a steady RM55-RM60 billion a month, to about RM61-RM66 billion a month.
Having said that, some of the decline in growth in June has come from lower prices, rather than lower volumes (Index numbers; 2005=100):
Note that export volume is barely above that of 2005; in fact the latest index reading is right back to 100. Instead, it’s been prices that have been a major factor in driving long term export growth. That’s changed a little lately – this year’s export growth is both volume and unit value driven.
Going forward though, I’d expect to see export “growth” rates continue to fall off, as will GDP “growth”, back to long term trends. Malaysia’s economic outperformance this year is really built on the back of really poor performance last year, not a sustained increase in potential growth.