Trade deficit at highest level in 12 years

Thailand's year-on-year trade deficit reached US$1.8 billion (Bt57 billion) last month, the highest since April 1996, due to escalating oil prices and a jump in gold imports, the Commerce Ministry said yesterday.

Exports grew 26.9 per cent last month to $13.76 billion, while imports rose 44.4 per cent to $15.57 billion.

The ministry said the higher deficit was mainly caused by rising oil prices.

To tackle the problem, the government will meet today to find ways to combat the growing energy and food crisis.

The meeting is expected to be chaired by Deputy Prime Minister and Commerce Minister Mingkwan Sangsuwan.

"The government will seek measures to tackle energy problems. It will seek to better manage energy imports," said Siripol Yodmuangcharoen, permanent secretary of the ministry.

The country's accumulated trade deficit in the first four months reached $2.98 billion.

Exports grew 22.24 per cent to $55.48 billion, while imports increased 39.6 per cent to $58.47 billion in the first four months of 2008.

Thailand recorded a huge trade deficit of $16.3 billion in 1996, when monthly deficits touched $2.07 billion in April that year.

Some observers feared Thailand could face another deficit as oil prices continue to surge.

Last month, oil imports jumped 88 per cent year-on-year to $3.65 billion.

Last year, Dubai's oil was only $65 a barrel. But crude prices have soared beyond $120 a barrel recently.

The deficit has worsened even though the actual volume of imported oil did not increase, said Siripol.

Gold imports also climbed significantly last month by 615 per cent to $536.8 million because of high demand.

But prices were more stable this year when compared with last year.

 Rachane Potjanasuntorn, director-general of the Export Promotion Department, said rising gold imports had benefited jewellery exports.

Exports from this segment rose

76 per cent to $2.2 billion in the

first four months this year.

Overall gold imports benefited jewellery exports and would not create a dent on the country's overall trading position, she said.

There are also positive signs that exports will grow gradually for the rest of the year, she said.

Thai exports should achieve the target of 12.5-15 per cent or $171 billion to $174 billion for this year.

Exports of agricultural goods increased 44 per cent in April, industrial exports rose 20.5 per cent, and other sectors grew 34.6 per cent.

However, sugar exports dropped 34.9 per cent last month because of high supplies from rival exporting countries.