BOT optimistic on export performance
The Bank of Thailand remains optimistic about the country's exports and the current-account balance despite market concerns over a slowdown in the global economy.
BOT Governor MR Pridiyathorn Devakula said that despite market expectations of a continuously rising US Federal Reserve interest rate, the world's largest economy continues to grow at a rate of more than 3 per cent per year. In addition, Japan and the European economies have recovered significantly, which will benefit Thailand's exports, he said. "Although the US central bank [may] continue to raise its key rate, it does not mean that the US economy will slow down," Pridiyathorn said. The market forecasts that the US central bank will raise its policy rate by another one-quarter of a percentage point next week to rein in inflation, which will push the rate to 5.5 per cent. Pridiyathorn dismissed concerns about sluggish export growth, which may fall short of the Commerce Ministry's 17.5-per-cent target. He said exports in the first quarter rose by about 17 per cent and the world economy would support this momentum. The BOT expects exports to remain a driver of the economy, while private consumption and investment both decelerate as the country faces delays in government spending towards the end of the year. Exporters are, meanwhile, complaining about export growth and competitiveness, mainly because of the recent strengthening of the baht against the US dollar. According to the BOT, exports grew 17.9 per cent in the first quarter from the same period in 2005. But then, year-on-year growth slowed to 11.8 per cent in April. The BOT forecasts export growth of between 11 and 13 per cent for the full year. But Karun Kittisathaporn, permanent secretary of the Commerce Ministry, predicted taht exports would grow by between 15 per cent and 17 per cent this year, slightly less than the ministry's target of 17.5 per cent. Exports in May expanded 18.8 per cent to US$10.84 billion (Bt415.5 billion), bringing overall export growth over the first five months of the year to 16.5 per cent from the same period in 2005. The ministry reported a trade deficit of US$646.4 million in May, resulting in a $1.6 billion deficit over the first five months. Karun said the trade deficit was compared to last year. The BOT governor said the central bank had anticipated a trade deficit for this year because of imports of materials and machinery for infrastructure projects. He said the current account deficit was in the read "as expected". "Although oil imports have caused the trade deficit, the import of machinery has been for economic development," he said. Pridiyathorn declined to comment on the government's expectation to run a budget deficit in the 2008 fiscal year, saying simply that such a decision should be made by a permanent government rather than the current caretaker government. - Anoma Srisukkasem, The Nation
|
