Export sector to rebound soon, govt agency says

Economy May 29, 2014 00:00


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THE COMMERCE MINISTRY |is optimistic that exports will re-cover soon after bottoming out |last quarter, as it does not expect |the coup to hold commerce back.

“Shipments will show stronger signs of recovery in the remaining months. Export growth in the first quarter should rebound to between 2 and 3 per cent,” Nuntawan Sakuntanaga, director-general of the ministry’s Internal Trade Promotion Department, said yesterday.

Year on year, exports dropped in April slightly by 0.87 per cent to US$17.24 billion (Bt563 billion) and in the first four months of the year by 0.97 per cent to $73.46 billion.

Exports are normally low in April as the month has many holidays, and slows down seasonally in March and April each year, but will soon recover in the coming months, she said.

The political circumstances in |the country would not affect |shipment ability and trading with other countries.

 To ensure foreign buyers understand that, the department has called for its honorary trade advisers abroad as well as Thai trade representatives in overseas posts to explain the situation urgently to trading partners.

They need to make clear that there have not been any interruptions to trade caused by political activities.

The department will propose export-promotion plans to the coup-makers’ National Council for Peace and Order soon.

To boost exports in the second half, the department will launch 80 trade-promotion activities.

The ministry is confident that exports this year will meet their growth target of 5 per cent, as long as the global economy expands |3.6-3.7 per cent, the prices of in-dustrial products increase by an average of 1.3 per cent and the baht stays around 31.50 against the US dollar. Last month it averaged 32.60.

This quarter, the ministry assumes exports will resume upward momentum, increasing |by 4-4.5 per cent on the sanguine outlook for the global econo-|mic recovery, particularly in the United States and the European Union.

However, Thai shipments |could run into trouble from |natural disasters, a shortage of |raw materials, especially shrimp, lower rubber prices and the ex-piration of the Generalised System of Preferences in the US last |August and in the EU early next year.

Imports dropped year on year by 14.5 per cent last month to $18.7 billion and by 15.2 per cent in the first four months to $74.2 billion, leaving a trade deficit of $1.45 billion last month and a surplus of $747 million in the first four months.

Industrial exports declined 0.2 per cent last month as Toshiba |relocated its hard-disk-drive plants to China and Vietnam after the heavy flood a few years ago.

Electronics exports to China |and the US also became sluggish. Exports of agricultural and agri-industrial goods dipped 7.2 per cent.

Fuel imports last month were down by 9.7 per cent year on year, while imports of capital goods and raw materials and semi-raw materials also slid by 14.5 and 23.5 per cent because of the depreciation of the baht.

Gold imports last month plunged 79.2 per cent year on year to $471 million.

The Bank of Thailand expects the export sector to continue to crawl but still play a role in driving the economy.

“The central bank expects the export sector to recover slowly |and still believes that the sector will |continue to stimulate the economy this year because export volumes are moderately growing, especially for industrial products,” spokeswoman Roong Mallikamas said yesterday.

The export figures released by the Commerce Ministry, which indicated that exports contracted by 0.9 per cent in April and 3.1 per cent in March, are in line with BOT’s forecast of a slow recovery in the export sector.

In March, the central bank projected 4.5-per-cent growth for exports this year.

Despite the positive numbers |for exports of industrial goods, prices for agriculture exports are still in bad shape, especially for |rubber, which caused the overall export value to go down along with it.

The reduction of agriculture-product prices largely reflects the slowdown of the Chinese economy. Rubber suffered the most, since China already has a huge stock of the material.