Malaysia’s current account balance (CAB) continued to record a surplus of RM7.6 billion in the second quarter of this year (Q2 2020), despite the global economic uncertainties and continuous spread of Covid-19, according to the Department of Statistics Malaysia (DOSM).
Chief statistician Mohd Uzir Mahidin (above) said the current account surplus was mainly contributed by net exports of goods of RM25.9 billion and a lower deficit in secondary income at RM1.9 billion.
"Imports of goods dropped at a faster pace as compared with the decline in exports resulting in a favourable performance of the overall goods account.
"In addition, secondary income reached the lowest deficit, as the number of foreign workers declined in this quarter that led to lower outward remittances," he said in a statement today.
For the first half of 2020, Mohd Uzir said the CAB lessened to RM17.1 billion against RM31.3 billion in the same period last year.
In contrast, he said, the services account registered the highest deficit ever at RM12.5 billion.
"With the country’s border closed to foreigners and restriction of cross-border movements, travel which is the backbone of the services account had been severely affected in Q2 2020, recording a deficit of RM3.1 billion," he said.
Mohd Uzir added that exports by air freight also fell abruptly to RM30.0 million in Q2 2020 from RM2.4 billion in the second quarter last year.
On the other hand, he said telecommunications, computer and information performed well in the quarter under review, with exports increasing to RM3.3 billion due to a surge in international demand for fixed and mobile networks services provided by local telcos.
“The financial account continued to register a net outflow of RM19.8 billion in Q2 2020, with the predominant contributor being other investment with a net outflow of RM41.3 billion, from a net inflow of RM22.1 billion in Q1 2020.
"This reflected mainly on net interbank lending abroad by the domestic financial sector," he said, adding that portfolio investment registered a higher net inflow of RM22.2 billion due to bond issuances by domestic companies.
Slowed FDI
Meanwhile, he said Malaysia’s international investment position (IIP) recorded a higher net asset position of RM57.3 billion in Q2 2020 from RM27.1 billion in the previous quarter.
He said the IIP performance in Q2 2020 was mainly contributed by direct investment (31.8 percent) and portfolio investment (24.3 percent).
DoSM said international reserves stood at RM443 billion in Q2 2020 against RM440 billion in the preceding quarter.
Mohd Uzir said foreign direct investment (FDI) in Q2 2020 slowed to RM2.2 billion from RM6.4 billion in the previous quarter due to the lower investment in the manufacturing sector.
"The FDI in this quarter was primarily from the Netherlands, British Virgin Islands and Singapore in mining and quarrying, financial and utilities," he said.
On the other hand, he said direct investment abroad (DIA) expanded to RM3.5 billion in the period under review with the main destinations being Indonesia, Canada and the United Kingdom and channelled to the financial, manufacturing as well as information and communications sectors.
-- Bernama
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