Malaysian exports continue to fall

Malaysia's exports contracted for the fifth consecutive month in June by dropping 6.9 percent on a year-on-year basis, due to weaker demand from its major trading partners.

Total exports in June amounted to $17.45 billion as compared with $18.77 billion in the corresponding period in 2012, according to trade data released by the International Trade and Industry Ministry Monday.

Decrease in exports was recorded mainly to China, South Korea, Japan and the US due to reduced exports of mainly electronic integrated circuits, optical and scientific equipment and palm oil, Xinhua reported.

Exports to China, Malaysia's largest trading partner, declined sharply by 20.5 percent year-on-year.

Malaysia's imports in June increased by 1.3 percent to $16.14 billion as compared to June 2012. The total trade stood at $33.61 billion, a 3.2 percent decline, while Malaysia enjoyed a $1.32 billion trade surplus.

Although central bank and government officials insisted that a strong domestic demand will continue to drive economic growth, some analysts predict that the country would fall short of the 5 percent growth target this year.

Rating agency Fitch cut Malaysia's outlook to "negative" last week, citing its rising debt levels and lack of budgetary reform.