Imports see biggest decline in six years

"With the steep devaluation of the baht, Thai traders may have hesitated to bring in capital goods and raw materials last month.

" This is a worrisome factor for future export expansion as lower imports may affect production in the future," Somkiat Triratpan, director of the Commerce Ministry’s Policies and Trade Strategies Bureau, said yesterday.

"However, as the baht has started to appreciate slightly, imports could improve in the remaining months," he said.

Import value plummeted last month by 26.2 per cent year on year to US$16.02 billion (Bt568 billion), and in the first nine months by 10.5 per cent to $153.8 billion.

It was the biggest import decline in six years and four months, since May 2009, when imports dropped by 40 per cent because of the global economic slowdown.

Imports of capital goods declined 23.1 per cent year on year last month, while imports of raw materials and semi-raw materials

decreased by 28.1 per cent. Gold imports in September were down 82.3 per cent to $213.8 million.

Last month, the baht averaged 35.4 against the US dollar, slightly stronger than September’s August’s 36.

In September, exports fell for the ninth straight month, contracting by 5.5 per cent from the same month last year to $18.81 billion. Excluding oil and gold, August’s the decline would have been 3.1 per cent.

Low oil prices

Exports in the first nine months slid by 5.0 per cent year on year to $161.56 billion, largely because of low oil prices and weak global trade. Excluding oil and gold, nine-month shipments were off 2.9 per cent.

In September, oil exports retreated 33.6 per cent, while gold exports advanced 590 per cent because of the sagging baht.

In the first nine months, oil shipments slipped 22.1 per cent, while gold exports increased 33 per cent.

Despite the sluggish global economy, the Commerce Ministry has maintained its target for export contraction for this year at 3 per cent.

The International Monetary Fund has revised down its forecast for global economic expansion for this year from 3.3 per cent to 3.1 per cent. It projects global trade shrinking by 11.2 per cent, but looks for a rebound to 2.4-per-cent growth next year.

The IMF also lowered its projections for economic growth in Japan this year from 0.8 to 0.6 per cent, in the Asean economy from 5.2 per cent to 4.6 per cent and Indian gross domestic product from 7.5 to 7.3 per cent. GDP growth in China and the European Union is still expected to be 6.8 per cent and 1.5 per cent respectively.

The Fund is slightly more optimistic about the United States, with GDP now expected to grow by 2.6 per cent, compared with the earlier forecast of 2.5 per cent.

The average global oil price is pegged at $51.60 per barrel this year and about $50.40 next year.

However, with signs of continuing slowdowns in the global economy and trade, Thailand’s exports for the whole year could decline more than the ministry’s projection of 3.5-5 per cent depending on performance in the remaining three months.

Based on the ministry’s assumption, if exports in the remaining months ran at $18 billion per month, the full-year contraction would be 5 per cent.

If they were $19 billion each month, the shrinkage would be 3.5-4 per cent.