Thai exports bank on Asian growth

The Commerce Ministry reported yesterday that Thailand’s exports in November showed a drop for the first time in 25 months since October 2009.

The result of the government’s measures to help exporters resume production after the flood crisis will also influence Thai exports next year, whether the manufacturing sector will face a brighter future or gloomy growth, Deputy Commerce Minister Siriwat Kajornprasart said yesterday.

Thai export value in November fell 12.44 per cent year on year to US$15.98 billion (Bt500 billion), due to the severe floods that hit the industrial sector. Imports also dropped 2.43 per cent to $16.87 billion, resulting in a trade deficit of $1.37 billion.

“Supply-chain disruptions took a heavy toll on the manufacturing sector during the month and was seen as the main reason for the decline in exports. The decline is expected to continue in December, largely due to the flood impact, which will result in annual export growth of 15 per cent this year,” said Siriwat.

Siriwat said that Thai exports are expected to recover to positive growth in the second quarter next year as shipment is expected to be slow in the first quarter due to flood impact.

He pointed out that the slowdown in the global economy next year would not be the only factor to influence Thai exports, but also the efficiency of measures to help manufacturers resume production after the flood subsides.

He said that if plant operations resume, Thai exports should return to strong growth soon.

Other factors that could impact Thai exports next year are an expected stronger baht, the higher cost of fuel, raw materials, and labour costs, as well as unexpected natural disaster.

To ensure growth next year, Siriwat said the ministry would focus more on the Asian market, in particular China, India, and Latin America markets amid expected high consumption and strong economic growth.

The industrial sector was the hardest hit last month, shrinking last month by 26.7 per cent, mainly due to drop in automobiles and parts export by 54.7 per cent, followed by 47.4 per cent in electronics, 42.5 per cent in toys exports, and 21.9 per cent in electric appliances. Agricultural goods exports still grew last month by 11.3 per cent, but only rice exports dropped by 27.7 per cent in terms of volume and 21.1 per cent in terms of value.

Thai exports during the first 11 months grew 19.04 per cent to $211.8 billion. Imports went up 25.47 per cent to $209.34 billion. The country locked in a trade surplus of $2.46 billion in the first 11 months.

Last month, exports to major markets showed a decline, due to their slower economic growth and the impact from the supply-chain disruption in Thailand. Exports to the EU slumped by 28.8 per cent, by 13.9 per cent to the US and by 8.7 per cent to Japan.

However, exports to Asean and other potential markets still increased last month – by 3.2 per cent to Asean market, 2.1 per cent to India, and 18.4 per cent to Latin America.