EU, Japan QE could boost Thai exports

The ministry revealed yesterday that the value of Thailand’s exports contracted for the second year in a row in 2014, by 0.41 per cent to US$227.57 billion (Bt7.41 trillion), after a 0.32-per-cent decline in 2013.

"Last year’s decline was due mainly to the unexpected drop in oil prices and lower prices of agricultural crops. Thai exports this year could also be affected by the slow economic growth in many countries, despite their QE measures, as we are worried about fluctuating exchange rates," said Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department.

She said the ministry would closely monitor the impact of the European Union’s monetary stimulus, since it could help shore its economy and increase demand for Thai goods. However, the baht could strengthen against the euro, making Thai imports more expensive.

Nuntawan remained optimistic about export expansion this year, with the ministry setting a 4-per-cent growth target.

With the European Central Bank injecting 60,000 euros (Bt2.2 million) per month into the economy, and Japan undertaking a US$1.4-trillion (Bt45-trillion) QE programme, these could stimulate economic growth in those two major export markets for Thailand. However, as a result of those same measures, more money could flow into Asia including Thailand, strengthening the baht and making Thai products less competitive.

To continue promoting the export sector, Nuntawan said the ministry would focus on many activities, in major markets with recovering economic growth, in Asean, and in emerging economies.

The ministry reported that total import value last year dropped 8.97 per cent to $227.95 billion, resulting in a trade deficit of $378.7 million.

In December, exports returned to slight year-on-year growth of 1.9 per cent to $18.79 billion, while imports decreased 8.74 per cent to $17.2 billion. Thailand thus locked in a trade surplus of $1.58 billion last month.

Excluding oil exports, Thai shipments were valued at $17.86 billion in December. Nuntawan said oil accounted for about 5 per cent of the total export value last month, down 20.4 per cent in value from a year earlier because of the lower global oil price.

Last year, cross-border trade with Thailand’s four immediate neighbours grew by 6.85 per cent to Bt987.57 billion. Exports were up 5.26 per cent to Bt589.66 billion, while imports rose 9.3 per cent to Bt397.9 billion.

Cross-border trade accounts for 69 per cent of the total trading value with the four neighbouring nations.