Malaysia's exports slowed further in July as falling demand in China and Europe overshadowed a rise in shipments to regional markets and the United States, data showed Friday.
Exports fell 1.9 percent to 58.12 billion ringgit ($18.65 billion) last month, compared with June's 5.4 percent increase and 6.7 percent in May, according to the trade ministry.
The latest figures are also well off the 7.1 percent jump seen in July 2011.
Coupled with a 9.5 percent jump in imports to 54.5 billion ringgit, the trade surplus of 3.62 billion was the lowest in a decade, dating back to April 2002.
Analysts said global sluggishness was beginning to pinch Malaysia's vital export sector and would likely last throughout the third quarter to the end of September before key market China, which is also suffering slowdown, stabilises.
Exports to China dived 13.1 percent to 7.03 billion ringgit while debt-wracked Europe imported just 4.86 billion ringgit worth of goods, a 20.6 percent drop that marks a fourth successive monthly decline.
However, shipments to other Southeast Asian countries climbed 17.8 percent to 17.17 billion ringgit, making up almost a third of the total, while exports to the United States grew 14.6 percent to 5.47 billion ringgit.
But while the problems being encountered by global heavyweights are hitting Malaysia's exports, rising imports show domestic demand is holding up, said Yeah Kim Leng, chief economist with financial research firm RAM Holdings.
"With the trade balance still positive, the increased imports are not a cause for concern. While exports will continue to decelerate this quarter, we hope a stimulus in China will help recovery in the fourth quarter," he said.
Total trade grew 5.5 percent for the first seven months of the year, with exports up 3.3 percent over the same period.
Southeast Asia's third-largest economy, resource-rich Malaysia relies heavily on exports of commodities such as palm oil and energy products, as well as electronics and other manufactured goods.
China, the world's number two economy, supplanted Singapore last year as Malaysia's top export market.