PREVIEW-Malaysia's August exports seen lower for second month

* August exports seen down 2.5 pct y/y vs -1.9 pct July

* August imports seen at 8.2 pct y/y, trade surplus 6.2 billion rgt

* Data due on Friday, Oct 5 at 0401 GMT

By Anuradha Raghu and Lilian Loh

Oct 3 (Reuters) - Malaysia's exports probably fell further in August, hit by weaker demand in China for its electronic products and lower commodity prices, economists polled by Reuters said, leaving the country more dependent on domestic demand to support growth.

The slowdown in China along with tepid demand in the United States and the debt-ridden euro zone have hurt Asia's export power-houses with Indonesia, Thailand and Singapore all reporting bigger drops in overseas sales than expected.

Malaysia's exports

were likely 2.5 percent lower in August from a year ago against a 1.9 percent dip in July, according to the median forecast of 16 economists in the poll.

Export volumes of Malaysian palm oil products in August fell 12 percent from a year ago, although shipments were almost 20 percent higher from July, according to cargo surveyor Societe Generale de Surveillance.

Crude palm oil prices in August were about 2.5 percent lower from a year earlier, according to Reuters data.

Economists said Malaysia's exports of electrical and electronic products, which make up one third of the total, probably moderated as reflected by the purchasing managers' indexes of its export markets.

"Recent data from the region has also pointed towards weak export growth that has remained prevalent, and we continue to see soft PMI readings in the major economies," said OCBC economist Gundy Cahyadi.

China's official factory PMI in September remained in contractionary territory for a second successive month despite improving from August's low.


Last week, the Malaysian government unveiled a budget, calling for greater spending and investment to offset the weakness in the external sector. It forecast gross domestic growth at 4.5 to 5.0 percent for the year and 4.5-5.5 percent in 2013.


According to the Reuters poll, the country's imports

remained resilient due to strong domestic investment and consumption, and probably rose 8.2 percent year-on-year, moderating from 9.5 percent growth in the previous month.

The trade surplus

was estimated at 6.2 billion ringgit ($2.03 billion) improving from 3.6 billion ringgit in July when it slumped to the lowest in more than a decade.

"External demand has turned increasingly weaker as growth outlook in the developed economies turned dimmer. This largely explains the poor export performance and Malaysia is definitely not alone in this regard," said Irvin Seah, an economist at DBS in Singapore.

Malaysia's exports are still expected to remain positive this year. Total exports are forecast to rise 2.7 percent in 2012 and 3.9 percent in 2013 according to the finance ministry's annual report released ahead of the federal budget presentation last Friday.

Forecasts for Malaysia's August exports and imports (percentage change from a year ago), and trade balance (billion ringgit): FORECASTS Exports Imports Trade balance (pct y/y) pct y/y) (bln ringgit) Median -2.5 8.2 6.2 High 1.7 13.4 8.2 Low -7 4.3 2.6 July -1.9 9.5 3.6 June 5.4 3.6 9.2 No. of respondents 16 16 16 ANZ 0.2 6.0 8.2 BA Merrill Lynch -3.1 9.0 4.8 Bank Islam -2.7 7.2 6.0 Citigroup -2.5 7.0 6.2 CIMB -4.3 2.5 7.3 Credit Suisse -2.5 10.0 4.7 DBS -2.7 13.4 3.0 Forecast Pte 1.7 10.0 7.1 HSBC -4.7 5.0 5.8 ING -7.0 9.0 2.6 JP Morgan -5.9 4.3 5.5 Maybank 0.4 8.2 7.3 MIDF 0.4 8.2 7.3 OCBC 1.4 8.4 7.8 OSK -0.5 9.5 6.2 TA Securities -0.1 6.4 7.8

($1 = 3.0510 Malaysian ringgit)

(Reporting by Anuradha Raghu and Loh Li Lian; Editing by Sanjeev Miglani)

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