THE COMMERCE Ministry projects Thai exports will grow by 4 per cent in the second quarter and 7 per cent in the second half of the year, thanks to signs of recovery witnessed last month. The annualised export forecast remains at 5-per-cent growth, though
“Thailand’s shipments should show a stronger sign of recovery in the second quarter of the year. However, there is still high concern over the political conflict affecting traders’ confidence,” Srirat Rastapana, permanent secretary to the ministry, said yesterday.
Without political turbulence, the export sector should witness growth of 10 per cent, she said, adding that the sector was now also under the pressure of the upward trend of fuel prices, drought and unstable exchange rates.
Despite showing an increase, Thailand’s export figures in February remained below market expectations, indicating weak global demand and low manufacturing activity at home.
DBS Research earlier expected that the monthly figures would show a 4.8-per-cent growth rate.
“We expected export growth to be slightly higher after the disappointing January number. For the most part, we remain of the view that export growth is the only bright spot for the economy at this point. But the risks are definitely abundant at this point.
“Both capacity utilisation and manufacturing production are still sliding. A close monitoring of these data is crucial going forward,” said Gundy Cahyadi, economist of the Singapore-based research house.
Still, the figures were better than in January, when overall export value contracted year on year. The Commerce Ministry’s data showed that export value in February grew 2.43 per cent from the same period last year to US$18.36 billion (Bt598 billion). Imports fell by 16.62 per cent to $16.59 billion, indicating weak domestic demand and resulting in a trade surplus of $1.76 billion.
In the first two months of the year, export value grew by just 0.2 per cent year on year to $36.27 billion, while import value sank 16 per cent to $37.02 billion. This produced a two-month trade deficit of $754 million.
According to a Foreign Trade Department survey of Thai traders, businesses planned to cut imports due to the downward trend in the baht, as many imports orders were completed last year when the unit appreciated against the US dollar.
Last month, agricultural exports dropped by 5.7 per cent, while industrial exports expanded by 6.8 per cent.
On the import side, gold imports dropped sharply from $2.17 billion in the same period last year to only $231 million. Despite some hurdles, the export sector will remain the key engine of the economy, given low domestic consumption and investment, said financial expert Somchai Pakapasvivat.
Speaking at yesterday’s Bangkok Bank “Start up ... the future of the Thai economy” seminar, he said the official 5-per-cent export growth target for the year would be under huge pressure, given the current export structure. Though the US economy started recovering last year, the sector has failed to cash in on the development because of low demand in the US for Thai products, he said.
“Thailand is the same as other emerging countries that are facing slower export growth. Industries that have to rely on labour and raw materials are ready to fade away from Thailand, and the export sector will gradually lose competitiveness if the country is unable to restructure its exports to high-value products,” he said.
Kosit Panpiemras, executive chairman of Bangkok Bank, said on the sidelines of the seminar that Thai economic growth would remain at 3 per cent over the next one or two years, due mainly to the results of populist policies introduced in the past few years.
The policies have resulted in high household debt and lower loan quality, he explained, adding that Bangkok Bank was maintaining its loan-growth target of 5-6 per cent for this year.