Exports shrink 7% in August, high 2012 trade deficit feared

 The contraction means the country will experience a massive trade deficit for the full year.
The overall trade deficit for the first eight months of the year stands at $13.1 billion.
This is due to a combined export decline of 1.31 per cent to $151.55 billion, while imports grew by 7.63 per cent to $164.66 billion, the ministry said.
Imports in August were down for the first time this year, dropping 8.18 per cent year on year to $20.77 billion, resulting in a trade deficit of $1.02 billion for the month.
However, Deputy Commerce Minister Poom Sarapol said that despite the huge accumulated deficit, Thailand should not end the year with a serious shortfall, as the trade deficit to date was due to higher import demand for machinery and capital goods to support the export sector.
“Thai shipments should grow by an average of $20 billion in the remaining months, which will ensure that the Kingdom’s exports will grow by 7 per cent this year.” He added, however, that in the worst-case scenario, if average shipments grew only $19 billion a month over the rest of the year, overall shipments would expand by just 4-5 per cent.
The minister said exports had continued to drop last month because of the serious impact from the European Union’s sovereign-debt crisis.
The August decline in exports has exceeded the ministry’s expectations, as it is still clinging to the hope of stronger export growth in the remainder of the year, which it expects to average $20 billion a month and drive full-year exports to expand by at least 7 per cent.
The euro-zone crunch has resulted in more serious impacts on global trade, he said, adding that other countries’ exports had experienced an even larger drop than Thailand’s.
For instance, Indian exports have fallen by 10 per cent, Indonesian shipments by 7.3 per cent, Malaysian exports by 2 per cent, Singapore’s by 10.6 per cent and Taiwan’s shipments by 4.2 per cent.
Last month, Thai export shipments of many goods, especially industrial products and some foods, to all major markets were hit hard.
Exports to Asean dropped by 12.3 per cent year on year, while sales to 15 countries in the EU fell 23.1 per cent and those to Japan shrank 12 per cent.
Exports to the United States fell 4.8 per cent, while shipments to China reduced by 12.9 per cent and those to the Middle East fell by 12.6 per cent.
Exports of rice dropped 38.7 per cent in terms of value, while overall food exports slumped 9.3 per cent, mainly for frozen shrimp, frozen fruit and frozen chicken.
Shipments of electronic goods plunged 15.4 per cent, electrical appliances by 6 per cent, leather goods and products by 16.3 per cent, and furniture and parts by 2.4 per cent.
Poom said the ministry would convene a meeting with government agencies such as the Inter-national Trade Promotion Depart-ment and the Foreign Trade Department on Monday to estimate export growth.
It will also continue to draw up measures to drive export growth and eliminate trade barriers.