Exports fell 2.2% in January m-o-m, but still up 20% for the whole year

The better-than-expected y-o-y growth was led by electronics and pharmaceuticals.

According to HSBC, sequential growth eased relative to December. Exports are expected to grow at a slower pace in 2011 following the post-crisis jump last year, but growth in overall economic activity is expected to keep pace with potential, calling for policy vigilance to keep inflation at bay.

Total exports grew in January by 17.4% y-o-y (vs. 12.3 % in December), while non-oil domestic exports grew 20.9% y-o-y (vs. 9.4% y-o-y in December). The growth numbers for NODX were well-above our forecast (15% y-o-y) and that of consensus (15.9% y-o-y). However, NODX sequential growth eased (2.2% m-o-m sa vs. 7.9% in December) and has come down in recent months on a 3m/3m SAAR basis (smoothed series). In real terms, NODX growth rose to 24.3% y-o-y (vs. 12.1% in December).

By products, NODX growth for electronics exports perked up (5.8% y-o-y vs. -1.1% in December) led by ICs, parts of PCs, and telecom equipment. Non-electronics exports also picked up pace (30.5% y-o-y vs. 16.2% in December) as pharma exports leaped (38.6% y-o-y vs. -2.8% in December) and exports of petrochemicals kept up the pace (31.5% y-o-y vs. 30.4% in December).

By markets, growth in NODX destined for the EU more than doubled (51.5% y-o-y vs. 20.9% in December). Exports to the US and China also picked up pace (to 19.5% y-o-y vs. -0.3% in December and 16.7% y-o-y vs. 10% in December, respectively). NODX to most other markets rose, especially for other emerging markets outside of ASEAN. The pick up in growth was driven by both electronics and non-electronics, with pharmaceuticals driving the latter in Europe's case.