It quoted the Statistics Department as saying that the surplus was triggered by a large surplus on trade account in the first three months.

Merchandise exports, f.o.b, increased by 5.7 per cent in the first quarter of 1998 to 69.1 billion ringgit compared to 65.4 billion ringgit in the previous quarter.

Merchandise imports, f.o.b, on the other hand, dropped by 4.6 per cent to 57.6 billion ringgit, from 60.4 billion in the fourth quarter of 1997. This pushed up the first quarter merchandise surplus to 11.5 billion ringgit, compared to five billion in the previous quarter.

The services account deficit also improved. It narrowed to 4.1 billion ringgit over the previous quarter's six billion.

The statistics department said the reduction in the services account deficit was due to an improvement in investment income, where net outflows declinedby 8.3 per cent to 3.3 billion ringgit; freight and insurance which fell 14.8 per cent to 2.3 billion; and other services which recorded a surplus of 0.3 billion from a 1.3 billion deficit in the previous quarter.

The services account deficit also recorded a 26.8 per cent improvement over the first quarter of 1997, the Bernama report said.