Exporters stick to 2% contraction forecast
With shipments falling for a fourth straight month in July, the private sector sees slimmer chances for export growth this year.
According to Nopporn Thepsithar, president of the Thai National Shippers’ Council, exporters are keeping to their forecast of a 2% contraction.
“For the first seven months, exports have yet to recover, and we expect the strong baht to exacerbate ailing exports,” he said.
Other risk factors i nclude the sluggish world economy and weak global consumption.
The Commerce Ministry yesterday reported that exports fell for the fourth straight month in July, with the contraction widening to 4.4% year-on-year that month against only 0.1% in June. Exports similarly contracted 4.4% in May after plunging 8% in April.
July’s exports fetched US$17.4 billion (601.7 billion baht), with imports totalling $16.20 billion, down 7.2% year-on-year.
Thailand had a trade surplus of $13.62 billion in July — its 15th straight month with a positive trade balance.
The ministry reported that exports of agricultural and agribusiness products shrank by 18.6% to $2.34 billion, led by rice (-35.1%), rubber (-34.8%), sugar (-33.8%) and tapioca products (-28.4%).
Exports of industrial products fell again in July by 0.4% to $14.07 billion after expanding for the first time in three months in June, when they jumped 3.1% to $84.3 billion.
The drop was largely because of falling car and car parts shipments (-6.7%), finished oil (-40.7%), plastic pellets (-14.8%), televisions and parts (-27%) and chemicals (-14.9%).
For the first seven months, the ministry reported that Thai shipments had shrunk by 2% year-on-year to $122.6 billion, while imports totalled $108.9 billion, a drop of 9.8%. Thailand had a trade surplus of $13.6 billion for the period.
Somkiat Triratpan, director of the ministry’s Trade Policy and Strategy Bureau, said the world’s economic recovery was still slower than expected while oil prices remained relatively low.
He said the country’s exports were unlikely to see any adverse effects from the baht’s appreciation.
Mr Somkiat noted, however, that it was not just foreign exchange movements that need to be monitored, but also the world’s changing economic environment. He particularly stressed the need to keep an eye on a possible interest rate hike from the US Federal Reserve and the risks associated with the asset purchasing programme known as quantitative easing if it is employed by more countries.
Given the overall global economic outlook, Mr Somkiat conceded that Thai shipments might be subject to a slight contraction.
According to Malee Choklumlerd, director-general of the International Trade Promotion Department, the department could call a joint meeting of Thai commercial counsellors and trade ministers from 65 offices worldwide next month to evaluate exports in the remaining months and map out new strategies to boost shipments in the year to come.
She said the authorities remain positive that shipment value in the remaining five months will recover, citing previous statistics from 2013-15 showing that shipments normally increase late in the year.
Manop Udomkerdmongkol, an economist at United Overseas Bank (Thai), said Thailand’s merchandise exports are expected to continue contracting, mainly due to changes in the global trade structure and a slowdown in the economies of China and other Asian countries.