Trade surplus hits new high
Thailand's trade surplus rose to a record high in March on the back of increased exports and slumping domestic confidence. Manufacturing grew slower during the month, reflecting lower domestic demand.
The current-account surplus in March reached US$2.26 billion (Bt78.63 billion), up from $1.66 billion in the previous month, while the trade surplus grew to $2.2 billion, from $1.12 billion in February, the Bank of Thailand reported yesterday. However, Amara Sriphayak, senior director of the bank's domestic economy department, told a news conference that despite the $5.45-billion current-account surplus recorded in the first quarter, the central bank was retaining its forecast for a full-year surplus in the range of $4 billion-$6 billion. Imports will rise due to government stimulus spending and the acquisition of aircraft by Thai Airways International in each of the three remaining quarters of the year, while external demand for Thai exports will slow, Amara said. The current account could swing to a slight deficit in the second and third quarters before returning to a surplus in the fourth, she added. The record trade surplus had been signalled by raw customs data released last week. The continued weakness in the domestic economy was also expected, so markets were not much affected by yesterday's data. The current-account surplus was only slightly higher than the trade balance, because tourism earnings were partially offset by the expatriation of funds by Japanese firms ahead of the end of the fiscal year on March 31. The March trade surplus was in line with expectations, but the current-account surplus was slightly better than expected. A Dow Jones Newswires poll had projected the surplus in the trade balance at $2.21 billion and in the current account at $2.08 billion. Private consumption fell 1.4 per cent year on year in March against growth of 0.2 per cent the month before. Growth in private investment was down 2.9 per cent versus a contraction of 1.3 per cent in February. The manufacturing production index was up 4 per cent year on year, decelerating from February's revised 5.2-per-cent growth due a slowdown in the automobile and building materials sectors. The rise in the March manufacturing production index was forecast by the survey at an average 5.8 per cent on year. Some analysts expect consumption and investment to remain weak until a new government is formed early next year after elections expected in December. However, others expect a partial recovery in the second half if a draft constitution can win public acceptance at a referendum in September and the government can expedite stimulus spending.
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