Recovery in some sectors to contain Thai export contraction to 3 per cent: Apiradi

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Recovery in some sectors to contain export contraction to 3 per cent: Apiradi
NOPHAKHUN LIMSAMARNPHUN,
PETCHANET PRATRUANGKRAI,
ERICH PARPART
THE NATION

BANGKOK: -- THAILAND'S EXPORT sector will likely benefit from the recovery of automotive, jewellery and food shipments in the remaining months of this year to contain the slide to minus 3 per cent year on year amid negative impacts from the global economic slowdown and China's recent devaluation of its currency, Deputy Commerce Minister Apiradi Tantraporn said.

In an exclusive interview with The Nation yesterday, the minister said Thailand's performance is still better than several of the world's top-20 exporting nations. She noted that Malaysia's exports dropped 13.8 per cent year on year and Singapore's exports dropped 13.3 per cent year on year in the first five months of this year, compared to Thailand's 4.2-per-cent contraction.

The global export slowdown is evidenced by an expected growth of only 0.3 per cent this year in global trade, compared to a double-digit growth rate 3-4 years earlier.

Secondly, the minister said China's yuan devaluation, which started on Monday with a nearly 2-per-cent drop against the dollar, is another big challenge for Thai exporters as some Chinese exports, which are similar to Thailand's, would be cheaper in the world market. Yesterday, the Chinese unit dropped further by as much as 5 per cent against the dollar.

Apiradi said the auto export sector should achieve its 6.9-per-cent growth target this year, despite a drop in the first five months due to a major model change. The jewellery and food sectors have strong potential to boost shipments in the remaining months of this year so that the country's overall exports could meet the revised target of minus 3 per cent, she said.

Auto exports currently account for 10 per cent of Thailand's total exports, while jewellery and food shipments are among the top-10 export sectors.

Regarding the yuan devaluation, the minister said Thailand's exports of electrical and home appliances as well as building materials could face fiercer competition from Chinese products, which are now cheaper, with electrical and home appliances accounting for 5-6 per cent of Thailand's total exports, and building materials accounting for 3 per cent.

While the prospects of a currency war among exporting nations have risen after China decided to devalue its unit on Monday, Apiradi hopes the situation will not worsen as exports account for as much as 70 per cent of Thailand's GDP whose 2015 growth has already been revised downward to less than 3 per cent.

Meanwhile, Finance Minister Sommai Phasee said the impact from China's devaluation should be limited, adding that the Bank of Thailand had reassured that the situation is under control and that Thailand's international reserves are enough to withstand the impact.

"Thailand could be affected, but the magnitude will be less severe than in other countries. There is no need for fiscal measures, but we will boost investor confidence for the real sectors."

"Most exports to China are raw materials such as plastic beads and rubber, not consumer goods, so they are not directly impacted by the devaluation while 18 per cent of our inbound tourists are Chinese, which is already high," he said.

Kobsak Pootrakool, executive vice president at Bangkok Bank, said there is a likelihood that that the China's central bank will opt to further devaluate the yuan, as Beijing is showing a readiness to use the exchange rate as another tool to boost the country's economy.

Source: http://www.nationmultimedia.com/business/Recovery-in-some-sectors-to-contain-export-contrac-30266565.html


-- The Nation 2015-08-14

[Srikcir]

"Beijing is showing a readiness to use the exchange rate as another tool to boost the country's economy."

No matter the cost to its trading partners like THAILAND. The Junta's newfound brotherhood with China seems second to China's own economic security.

Surprise..Surprise!