Malaysia's Balance Of Payments Improves In Q1 2007

KUALA LUMPUR, June 29 (Bernama) -- Malaysia's overall balance of payments during the first quarter of 2007 improved to RM15.5 billion from -RM2.7 billion in the fourth quarter of 2006.The current account continuously remained positive albeit at lower surplus of RM20.1 billion from RM27.9 billion posted in the previous quarter, the Statistics Department said in a statement Friday.The financial account switched to a modest net inflow of RM2.8 billion from net outflow of RM20.0 billion previously, resulting in smaller errors and omissions of -RM7.4 billion from -RM10.5 billion in the previous quarter, it added.Meanwhile, the international reserves held by Bank Negara Malaysia during the period increased to RM15.5 billion from a decrease of RM2.7 billion posted a quarter ago.According to the department, the overall balance surged by RM10.2 billion to RM15.5 billion from RM5.3 billion recorded in the same period last year.On a yearly basis, the surplus in current account declined marginally to RM20.1 billion from RM20.4 billion while the financial account recorded a net inflow of RM2.8 billion from an outflow of RM5.1 billion.The external reserves of Bank Negara which amounted to RM15.5 billion rose substantially when compared with a modest increase of RM5.3 billion posted a year ago, the department said.The surplus in the current account of RM20.1 billion, which declined by 28 percent in the previous quarter, was mainly due to lower surplus on goods amounting to RM27.6 billion, down from RM36.8 billion in the earlier quarter.According to the department, this was mainly attributed to bigger drop on exports f.o.b (free on board) relative to imports f.o.b in the current quarter.On the other hand, the deficits on services, income and current transfers improved by RM0.8 billion to RM0.5 billion, RM0.5 billion to RM3.1 billion, and RM0.2 billion to RM3.8 billion respectively.The reduction on exports f.o.b by RM13.6 billion or 8.9 percent from RM152.2 billion in the fourth quarter of 2006 was mainly reflected in lower demands for palm oil and palm oil-based products, electrical and electronic products, and timber and timber-based products, the department said.At the same time, imports f.o.b which declined by 3.9 percent or RM4.5 billion from RM115.5 billion previously was mainly attributable to lower demand for machinery and transport equipment, and manufactured goods and articles.Year-on-year, the surplus on goods dropped by RM4.1 billion or 12.9 percent to RM27.6 billion in the first quarter of 2007 from RM31.7 billion in the same period last year, the department said.The drop was mainly due to higher increase on imports f.o.b relative to exports f.o.b, it added.