Ministry targets 5% export growth this year

Economy February 01, 2014 00:00

By Petchanet Pratruangkrai

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The Commerce Ministry expects Thai overseas shipments this year to grow by 5 per cent, despite the potential for the political unrest to hit some industries, after last year saw the first export contraction since 2009.

The ministry yesterday reported that 2013 shipments had dropped 0.31 per cent to US$228.52 billion (Bt7.54 trillion), the first fall since the “hamburger crisis” of four years ago. 
The Kingdom also locked into a huge trade deficit of $22.19 billion last year.
However, exports in December increased 1.87 per cent year on year to $18.43 billion, after monthly shipments had shrunk for the previous three consecutive months. 
Imports last year rose 0.29 per cent to $250.72 billion, while December imports fell 9.9 per cent to $59.2 billion.
“Thai shipments should show positive signs of recovery throughout this year, following stronger global economic growth. The political unrest should not have a huge impact on the manufacturing and export sectors, which has led to the ministry aiming to ensure export expansion of at least 5 per cent this year,” said Srirat Rastapana, permanent secretary of the Commerce Ministry.
The 5-per-cent export target would mean a total value of $239.95 billion over the course of the year.
The basis used to arrive at the ministry’s goal is that the global economy would grow by 3.7 per cent, the baht’s value would be in a range of 29-34 against the US dollar, while the US would continue to cut its quantitative-easing measures.
The ministry’s export projection is, however, quite low when compared with other agencies such as the National Economic and Social Development Board, the Bank of Thailand and Kasikorn Research Centre, all of which forecast growth of 7 per cent; Siam Commercial Bank, which expects 8 per cent; the Finance Ministry, which predicts 7.5-per-cent expansion; and the University of the Thai Chamber of Commerce, which projects 6.5 per cent.
Srirat said the ministry was being quite conservative due to uncertainty over the pace of global economic growth, as well as some concern over the potential for the ongoing political conflict to negatively affect exports. 
The ministry expects the global economy to grow sharply, which could result in double-digit export expansion this year.
Worst-case scenario
In its worst-case scenario, shipments would expand by less than 5 per cent, although they would not shrink for a second consecutive year, she said.
The 0.31-per-cent decline last year meant the ministry had missed its final export target of 1 per cent, after revising its projection downwards three times during the year. Its initial target was for export growth of 7-7.5 per cent, which was later cut to 4 per cent, and finally to just 1 per cent.
The failure to achieve positive export growth was due to the downward trend of the global economy and a slowdown in trading in many export markets, she added. 
Thai exports to many key markets dropped last year. They fell by 5.2 per cent to Japan, by 4 per cent to South Korea, by 3.8 per cent to South Asia, by 3 per cent to Indonesia and by 2.1 per cent to Africa. 
Shipments to Asean increased by 5 per cent, to the European Union by 2.7, to China by 1.4 per cent and to the US by 0.8 per cent.
Agricultural and agro-industrial exports dropped 4.9 per cent last year, while the industrial sector saw a fall of 0.2 per cent.
The Kingdom was, however, not the only country to experience an export contraction in 2013. For example, Malaysian exports dropped 8.96 per cent, Indonesian shipments by 6.33 per cent, and Australia’s by 1.5 per cent.
China’s exports, meanwhile, grew 7.83 per cent, Vietnam’s by 16.47 per cent and India’s by 5.6 per cent, while the Philippines saw 1.38-per-cent expansion and Singapore’s shipments grew by 0.35 per cent.