EU, Japan QE could boost Thai exports

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EU, Japan QE could boost Thai exports
Petchanet Pratruangkrai
The Nation


Nuntawan

BANGKOK: -- Despite many countries launching quantitative-easing (QE) measures to stimulate their economies, the uncertain global recovery and the consequent fluctuations in exchange rates remain major negative factors that could hold back Thai exports this year, for which the Commerce Ministry has projected 4-per-cent expansion.

The ministry revealed yesterday that the value of Thailand's exports contracted for the second year in a row in 2014, by 0.41 per cent to US$227.57 billion (Bt7.41 trillion), after a 0.32-per-cent decline in 2013.

"Last year's decline was due mainly to the unexpected drop in oil prices and lower prices of agricultural crops. Thai exports this year could also be affected by the slow economic growth in many countries, despite their QE measures, as we are worried about fluctuating exchange rates," said Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department.

She said the ministry would closely monitor the impact of the European Union's monetary stimulus, since it could help shore its economy and increase demand for Thai goods. However, the baht could strengthen against the euro, making Thai imports more expensive.

Nuntawan remained optimistic about export expansion this year, with the ministry setting a 4-per-cent growth target.

With the European Central Bank injecting 60,000 euros (Bt2.2 million) per month into the economy, and Japan undertaking a US$1.4-trillion (Bt45-trillion) QE programme, these could stimulate economic growth in those two major export markets for Thailand. However, as a result of those same measures, more money could flow into Asia including Thailand, strengthening the baht and making Thai products less competitive.

To continue promoting the export sector, Nuntawan said the ministry would focus on many activities, in major markets with recovering economic growth, in Asean, and in emerging economies.

The ministry reported that total import value last year dropped 8.97 per cent to $227.95 billion, resulting in a trade deficit of $378.7 million.

In December, exports returned to slight year-on-year growth of 1.9 per cent to $18.79 billion, while imports decreased 8.74 per cent to $17.2 billion. Thailand thus locked in a trade surplus of $1.58 billion last month.

Excluding oil exports, Thai shipments were valued at $17.86 billion in December. Nuntawan said oil accounted for about 5 per cent of the total export value last month, down 20.4 per cent in value from a year earlier because of the lower global oil price.

Last year, cross-border trade with Thailand's four immediate neighbours grew by 6.85 per cent to Bt987.57 billion. Exports were up 5.26 per cent to Bt589.66 billion, while imports rose 9.3 per cent to Bt397.9 billion.

Cross-border trade accounts for 69 per cent of the total trading value with the four neighbouring nations.

Source: http://www.nationmultimedia.com/business/EU-Japan-QE-could-boost-Thai-exports-30252794.html


-- The Nation 2015-01-28

[Thai at Heart]

Funny this. That headline doesn't really match what she says.

Always look on the bright side of life I suppose.

[Crazy chef 1]

which goods are they talking about?thought the EU and Japan prefer quality products ...

[cloudhopper]

Either the minister or the author is an economic illiterate.

[PepperMe]

Totally contradictory.

But get your excuses in before your 4% prediction takes a dive.

This QE is going to get out of hand, and I can see not only a global economic crisis, but a complete global economic meltdown.

It has been long predicted. I don't like QE and it seems the US have started a trend that is going to backfire. The EU and Japan now going to get involved.

Eventually many more countries will follow until the USA tells everyone to stop it, but who are they to lay demands?... The USA will default on their massive national debt, and with an impending collapse of the Euro, we will all be trading in the YUAN.

[Ruud4u]

The expectations of Thai ministers and managers are always optimistic and of course there well be a reason at the end of the year why Thailand didn't reach the 4% grow.

I think that the QE operations in Europe and Japan not have the results as QE had before, because they are more busy to pay their outstanding debts than investing in employment and industry.

When the value of euro and yen get weaker they will more export than import. Thailand will not have advantage of the QE.
I expect the most important businesscountry will be China, because that country is developing quickly to get the same level as Hong Kong and Singapore. They have also big money to spend.

So don't be depending on Europe or Japan, maybe investing in Thailand by Thai enterpreneurs could be also attractive to have more quality product to export and don't search it in agri-culture products because they are low priced.

I believe a big investment in the quality service in tourism can bring good money, because there is a lot of terrorism in countries that tourists will search safe places to spend their holiday-money.

Good luck for 2015 Thailand and ask foreigners to help your country.

[asiamaster]

The only effect QE has had is a further drop of the Euro and I believe the same is happening with the Yen. So this will NOT stimulate exports from Thailand -on the contrary. It also could mean a further drop in tourists from Europe.

Thailand needs to devaluate THB by at least 10-20%

[mommysboy]

The baht is already strong. QE will undoubtedly make it even stronger. I wouldn't be surprised if exports to Japan and EU decline.

[trogers]

QE and economic growth are separate issues. QE is for reduceing debts using taxpayer's money.

The increase in money capital from debt repayment usually ends up for speculation in the asset market, stocks and real estate, with minimal amount to consumption.