Strong baht clouds 9% export growth target

The Commerce Ministry could revise its 9-per-cent export-growth target for this year in the second quarter if the baht's strengthening is not contained.

Last year exports rose 3.13 per cent to US$229.51 billion while imports jumped 8.22 per cent to $247.59 billion, leaving a trade deficit of $18.07 billion, the ministry reported yesterday.

The ministry missed its 2012 export-growth target of 5-7 per cent because the euro zone's downturn stunted global trade.

In December alone, exports leaped 13.45 per cent to $18.1 billion from the same month in 2011, while imports rose 4.67 per cent to $20.46 billion, putting the monthly trade deficit at $2.36 billion.

To ensure strong export growth this year, the ministry called on government agencies to help manage the baht's value and ensure that it would not appreciate too much.

Exports still account for more than 70 per cent of gross domestic product.

The baht should be stabilised to ensure strong economic expansion, said Srirat Rastapana, director-general of the International Trade Promotion Department. Small and medium-sized exporters and producers would be hit hard from the baht's strengthening, so agencies need to help solve the problem.

Exports could fall short of the ministry's target of $251.75 billion (Bt7.72 trillion) this year if the baht continues to rise, as the forecast assumes an average value of Bt30 against the US dollar.

With the currency moving towards Bt29 to the greenback, exports could be hurt in both baht and US dollar terms.

The ministry plans to update the export target in May during its meeting with overseas trade representatives. Many negative factors, including the baht's appreciation and rising labour and raw-material costs, could restrain the export sector.

Shipments abroad were disappointing last year because of the slowing global economy and impact from the euro crunch. However, every country faced an export shrinkage last year.

Shipments should gradually increase this year after strong industrial expansion following the flood and before the ASEAN economic integration.

The picture was not completely bleak last year, as exports to new markets surged to compensate for the drop-off to traditional markets.

Last year, exports to the European Union 15 fell by 9.2 per cent and to Japan by 1.6 per cent, but to the US grew 4.6 per cent and to Australia by 22.1 per cent. Among emerging markets, exports rose by 5 per cent to Asean, 2.5 per cent to China, 5.7 per cent to India, 6.6 per cent to the Middle East, 6.7 per cent to Africa and 14.2 per cent to Latin America.

But exports to the EU-12 dipped by 13.7 per cent and to Russia and the Commonwealth of Independent States by 7.5 per cent.

By industry, exports of agri-industrial products slipped by 10.8 per cent last year while industrial goods rose 7 per cent, mainly on the 29.9-per-cent advance in automobiles. Construction materials were up 26.4 per cent.

Exports of rice last year declined by 28 per cent and of frozen shrimp by 17.3 per cent and rubber by 31.1 per cent.