Govt moves to cut dependence on exports

Commerce Minister Kittiratt Na-Ranong said yesterday that domestic consumption accounts for 30 per cent of the country's economy and exports for 70 per cent.

He said the government's new strategy would cushion the country against impacts from a global economic slump. He added that the government's policies - the hike in minimum wage and starting salary for graduates and the rice-pledging scheme - would encourage domestic consumption in the near future.

The Commerce Ministry has officially revised up its export growth target for this year to 20 per cent from 15 per cent, worth US$234 billion (Bt7 trillion), thanks to significant export gains in the first eight months.

The value of Thai shipments in the first eight months was strongly up by 26.4 per cent to $158.06 billion.

Permanent secretary at the Commerce Ministry Yanyong Phuangrach said that although there was a slowdown in growth to some markets, including the US and the Eastern Europe countries, Thai exports would not be impacted much as the country has shifted its export focus to emerging markets.

"Thai shipments are expected to exceed the previous target of 15 per

 cent to at least 20 per cent growth this year," Yanyong stressed.

The ministry also reported that Thailand had posted a trade deficit of $1.2 billion (Bt44.37 billion) for the first time in four months after imports in August outpaced exports due to an increase in imports of fuel and gold.

The value of exports last month continue to jump, surging 31.1 per cent to $21.56 billion, setting a Thai record for monthly export value. However, Thailand's imports also surged by 44 per cent to $22.77 billion, mainly from higher import of gold.

Last month, gold import was up by 59.7 per cent in terms of volume - 27 tonnes - and 143 per cent in value - $1.54 billion. Import of fuel soared 77.5 per cent to Bt4.89 billion.

However, the ministry is confident that Thailand will end up having a trade surplus of at least $1 billion to $2 billion by the end of the year. Import is expected to expand strongly due to an increased demand for raw materials and machinery, while exports will also continue to grow this year.

Imports in the first eight months were up by 28.5 per cent to $153.02 billion. The country still enjoyed a trade surplus of $5.04 billion in the first eight months of the year.

Last month, exports from the farming and industrial sectors grew by 64.3 per cent and 16.5 per cent respectively. Exports of some industrial goods, mainly automobiles, dropped by 9.5 per cent due to some plants not increasing their production capacity following the tsunami impact in Japan. Exports of toys dropped by 17.6 per cent amid lower orders from the US and EU markets.

Most export markets showed considerable growth last month, with the exception of Eastern Europe which dropped by 5.5 per cent mainly due to the situation in Greece and the Czech Republic. Shipments to the US continued to show slower growth, of only 3.6 per cent last month.

Nuntawan Sakuntanaga, director-general at the Department of Export Promotion, said exports to the US are expected to see slower growth amid lower demand for some goods, mainly furniture, toys and electric appliances.

Exports to the US are expected to grow only 10-12 per cent by the end of this year from 15.4-per-cent expansion in the first eight months of the year.

Paiboon Ponsuwanna, chairman of the Thai National Shippers' Council said that shipments could see slower growth in the fourth quarter of this year mainly due to the global economic slowdown and the obstruction to transportation from the flooding.

However, the country should achieve at least 20 per cent export growth this year due to high gains in the first eight months, he noted.