Thai Exports Fall For Eighth Month As Imports Improve

[LaoPo]

Thai Exports Fall for Eighth Month as Imports Improve

By Suttinee Yuvejwattana

July 20 (Bloomberg) -- Thailand’s exports fell for an eighth month in June as the global recession cut demand, highlighting the economy’s dependence on stimulus spending to revive growth.

Shipments dropped 25.9 percent from a year earlier to $12.3 billion, the Commerce Ministry’s Permanent Secretary Siripol Yodmuangcharoen said. That follows a 26.6 percent contraction in May. Imports retreated the least since December.

“Lower agricultural prices and weak global demand are still a drag on exports,” said Pimonwan Mahujchariyawong, an economist at Kasikorn Research Ltd., in Bangkok. “The magnitude of the contraction will moderate soon given rising orders in our electronics sector and improving trade data in other Asian countries.”

Policy makers in the Southeast Asian nation have begun saying the economy may be past the worst of its first recession in a decade as government spending kicks in. Thailand’s manufacturers may soon join counterparts from India to South Korea in reporting improvements in production.

“Some economic indicators should improve from now,” Bank of Thailand Governor Tarisa Watanagase said today in Bangkok. “Risks still remain, like everywhere, but the pace of contractions will moderate.”

Imports fell 29.3 percent to $11.4 billion as manufacturers bought more components used to make exports. The drop follows a 34.7 percent slide in May. The trade surplus in June narrowed to $937 million from a $2.41 billion excess a month earlier.

Orders Returning

Exports, which make up about 60 percent of the economy, haven’t risen since October. The price of rice, of which Thailand is the world’s largest exporter, last month averaged $581 a ton, 33 percent less than a year ago.

“We see export orders in the next three months and that lessens the prospect that the economy will worsen,” Amara Sriphayak, a Bank of Thailand official, said June 30.

Orders to electronics, computer and food producers have improved, Rachane Potjanasuntorn, director general at Export Promotion Department said today, adding the outlook for the automotive and jewelry industries remains unclear.

Thailand’s SET Index of stocks climbed 2.2 percent as of 2:42 p.m., extending its gain this year to 35 percent. The baht added 0.1 percent to 34.03 per dollar.

‘Worst is Behind’

Contractions in Southeast Asia’s second-largest economy have “stabilized,” the Bank of Thailand said July 15 when it held its benchmark interest rate at 1.25 percent.

The nation’s seven-month-old government said it would spend more than 1.4 trillion baht ($410 billion) by the end of 2012. The investment plan, involving transportation, water distribution, health and education projects, is in addition to a 116.7 billion-baht stimulus package of training programs, cash handouts and public works.

Thailand’s economy shrank 7.1 percent in the first quarter after exports collapsed. Prime Minister Abhisit Vejjajiva said on June 9 “the worst is behind us” and he expects gross domestic product will return to annual growth in 2010.

Asia’s economies are starting to show signs of recovery from the worst global recession since the Great Depression, prompting policy makers to stop lowering borrowing costs.

China’s export growth may return to “normal” by the end of this year or early 2010, an adviser to the nation’s central bank said July 1. Singapore’s exports dropped the least in nine months in June, helped by inventory restocking of electronics.

Thailand’s exports may contract between 15 percent and 19 percent this year, the Commerce Ministry’s Siripol said on June 25. Shipments may continue to decline in the third quarter and return to growth in the last three months of 2009, he said.

-Bloomberg

LaoPo

[givenall]

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May be strong Bth has something to do with weak exports. Why bth is not around 38bth/$

Edited July 21, 2009 by PeaceBlondie
Never need to copy-paste entire OP early in thread. PeaceBlondie.

[mommysboy]

Arguments may well rage as to whether it's this or that or the other that has caused it, but point is that this moves now to worst case scenario. THAILAND IS NOW IN BIG TROUBLE. It will face a crunch the equal of USA.

[Phatcharanan]

Arguments may well rage as to whether it's this or that or the other that has caused it, but point is that this moves now to worst case scenario. THAILAND IS NOW IN BIG TROUBLE. It will face a crunch the equal of USA.

I doubt it.

[roamer]

"Sterling may well be in for a rough time but there are also other currencies with an uncertain future and certainly I would suggest that the Thai baht is one of those. Granted Thailand has strong foreign reserves at present but one thing we can be sure of is that this economic crisis has bought with it the wind of change. For example, many multinational companies will have been using this period to reassess their manufacturing plans for the future. Whereas once Thailand attracted a lot of investment for manufacturing especially in the heavy engineering and automotive businesses, this may no longer continue to be the case. Not least is the cost of production in Thailand quite high, but other nations have emerged that that may prove far more attractive to investors than Thailand. The high baht is only one factor, the continuing political instability won't have gone unnoticed by those multinationals who are continually reassessing their options. The simple fact is Thailand is no longer an attractive investment for many industries, but one that is subject to increasing bureaucracy and corruption and higher costs, also the skills base does not appear to be getting any wider and certainly the English skills are not becoming any more proficient.

Given the the over reliance of the importance of exports to Thailand's there may be times ahead when Thailand is going to start to struggle, nothing stays the same forever and this country and its successive failed governments and policies, lack of forward planning, innovative thinking, inadequate education and social divisions hardly leads me to believe that the foundations for its continued success are any stronger or cohesive than the foundations of the crumbling condominiums one sees around the country.

As poor as the present outlook might be for Sterling it nevertheless has the foundations and institutions that will ensure its survival, its been there before and will no doubt come out the other end, bruised and battered but intact. I think Thailand is too much of the new kid on the block to be able to make the same assumptions about the strength of the Thai baht."

I posted the above on another topic, but the facts remain the same... actually that's not the case, things get worse day by day, you can soon expect to see countries are advising their nationals to avoid duty-free shops in Bangkok airport for fear of being fitted up on theft charges, that's really going to help tourism.

I don't expect that it will be long before I see a journalist on TV say something along these lines;

" it's one thing for a country to rely on exports for 60% or more of its GDP, it's another thing to expect that will continue when your currency has been supported to an artificial high so that is no longer competitive, that sealed Thailand's fate."

Actually if this country wanted a product to export it should try to make rifles that only shoot downwards, because nobody, repeat nobody, can shoot itself in the foot better.

[Rinrada]

Housing market too a wee jump this month...UPwards... but too early to celebrate...

Everyone is staying at home.....2 weeks in Blackpool instead of Patti and yet UK still got 27 M visitors who spent a lot of Dosh....mostly Euros ...Merci Monsieur je vour en pris..danke schun...Mein Heir et auusi Les Ruskis.....Tavarish...

BA is ready to go Bankrupt and if you sneeze at checkin ....yer out....home with you ......UNCLEAN....

and the £ hit ...1-55 to the Green B...Howday partners.....

TAT still recon on 12 miion toorists ....great but dont go near the duty Free otherwise........