Dec trade deficit hits new high

The Commerce Ministry reported yesterday that the value of Thailand’s exports in December fell 2 per cent to $17.01 billion, a result of the flood impact on the manufacturing sector. Imports meanwhile jumped by 19.11 per cent to $19.14 billion.

“Despite the large trade deficit last month, the high value of imports is a positive sign that exports will grow gradually for the rest of the year,” said the ministry’s permanent secretary, Yanyong Phuangrach. “Demand for machines and raw materials was up significantly as enterprises want to replace damaged machinery.” 

Thailand recorded a huge trade deficit of $16.3 billion in 1996, with the monthly deficit touching $2.07 billion in April.

In December 2011, import of raw materials and semi-raw materials soared by 25.8 per cent, while that of capital goods rose 20 per cent, mainly for machines and parts and electronic goods.

Yanyong expects that imports will continue to increase in the next few months as the industrial sector fuels demand for rehabilitation of its plants after the floods. However, the country is not at risk of any economic difficulty due to the large amount of imports, as they will benefit the export sector in the long run.

In addition, given the mild 2-per-cent contraction in December exports, annualised export value in 2011 showed a large increase over the previous year. 

The total export value went up by 17.2 per cent to $228.82 billion, even higher than the Commerce Ministry’s 15-per-cent growth target. 

Thailand locked in a trade surplus of $335 million last year, on the back of the import value of $228.49 billion, which was up by 24.9 per cent year on year. The ministry projects that exports this year will continue to grow by at least 15 per cent to $263 billion. Yanyong said exports should recover shortly after the industrial sector has fully recovered from the floods. 

Although the global economy is expected to show slower growth, the recovering industrial sector, rising prices of agricultural goods, and strong growth of emerging markets will drive Thai export expansion this year, he said.

Last month, shipments of most industrial goods dropped, including electronic goods by 26.9 per cent, electric appliances by 12.9 per cent, automobiles by 6.6 per cent, garments by 16.8 per cent, furniture by 9.5 per cent, and home decorative items by 12 per cent. Export to some markets also dropped last month.