Imports see biggest decline in six years

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IMPORT
Imports see biggest decline in six years
Petchanet Pratruangkrai
The Nation

BANGKOK: -- The deflating baht sent import value in September into its deepest decline in six years, creating concern for future exports.

"With the steep devaluation of the baht, Thai traders may have hesitated to bring in capital goods and raw materials last month.

" This is a worrisome factor for future export expansion as lower imports may affect production in the future," Somkiat Triratpan, director of the Commerce Ministry's Policies and Trade Strategies Bureau, said yesterday.

"However, as the baht has started to appreciate slightly, imports could improve in the remaining months," he said.

Import value plummeted last month by 26.2 per cent year on year to US$16.02 billion (Bt568 billion), and in the first nine months by 10.5 per cent to $153.8 billion.

It was the biggest import decline in six years and four months, since May 2009, when imports dropped by 40 per cent because of the global economic slowdown.

Imports of capital goods declined 23.1 per cent year on year last month, while imports of raw materials and semi-raw materials

decreased by 28.1 per cent. Gold imports in September were down 82.3 per cent to $213.8 million.

Last month, the baht averaged 35.4 against the US dollar, slightly stronger than September's August's 36.

In September, exports fell for the ninth straight month, contracting by 5.5 per cent from the same month last year to $18.81 billion. Excluding oil and gold, August's the decline would have been 3.1 per cent.

Low oil prices

Exports in the first nine months slid by 5.0 per cent year on year to $161.56 billion, largely because of low oil prices and weak global trade. Excluding oil and gold, nine-month shipments were off 2.9 per cent.

In September, oil exports retreated 33.6 per cent, while gold exports advanced 590 per cent because of the sagging baht.

In the first nine months, oil shipments slipped 22.1 per cent, while gold exports increased 33 per cent.

Despite the sluggish global economy, the Commerce Ministry has maintained its target for export contraction for this year at 3 per cent.

The International Monetary Fund has revised down its forecast for global economic expansion for this year from 3.3 per cent to 3.1 per cent. It projects global trade shrinking by 11.2 per cent, but looks for a rebound to 2.4-per-cent growth next year.

The IMF also lowered its projections for economic growth in Japan this year from 0.8 to 0.6 per cent, in the Asean economy from 5.2 per cent to 4.6 per cent and Indian gross domestic product from 7.5 to 7.3 per cent. GDP growth in China and the European Union is still expected to be 6.8 per cent and 1.5 per cent respectively.

The Fund is slightly more optimistic about the United States, with GDP now expected to grow by 2.6 per cent, compared with the earlier forecast of 2.5 per cent.

The average global oil price is pegged at $51.60 per barrel this year and about $50.40 next year.

However, with signs of continuing slowdowns in the global economy and trade, Thailand's exports for the whole year could decline more than the ministry's projection of 3.5-5 per cent depending on performance in the remaining three months.

Based on the ministry's assumption, if exports in the remaining months ran at $18 billion per month, the full-year contraction would be 5 per cent.

If they were $19 billion each month, the shrinkage would be 3.5-4 per cent.

Source: http://www.nationmultimedia.com/business/Imports-see-biggest-decline-in-six-years-30271636.html


-- The Nation 2015-10-27

[Eric Loh]

The declining baht not only the sole reason. My imports have declined by half and much due to the slow economy. I will be more than happy to take a lesser profit if only I have sales.

[trogers]

Slowing economy and lower consumption of imports are part and parcel of lowering household debts.

What is important would be any increase in capital investment for future real growth...

[dageurreotype]

The declining baht not only the sole reason. My imports have declined by half and much due to the slow economy. I will be more than happy to take a lesser profit if only I have sales.

The baht is 'stabilising' read strengthening and most certainly hasn't 'declined steeply'

[FangFerang]

No money no honey.

[TheCruncher]

The declining baht not only the sole reason. My imports have declined by half and much due to the slow economy. I will be more than happy to take a lesser profit if only I have sales.

The baht is 'stabilising' read strengthening and most certainly hasn't 'declined steeply'

I guess you just exited your cave about a week ago.

[dageurreotype]

The declining baht not only the sole reason. My imports have declined by half and much due to the slow economy. I will be more than happy to take a lesser profit if only I have sales.

The baht is 'stabilising' read strengthening and most certainly hasn't 'declined steeply'

I guess you just exited your cave about a week ago.

No, I just read the BP's financial news this very morning. You?

[Thian]

Because the crisis is coming to Thailand. Our property developer even stopped building now and many people have their new house for sale.

Condo's are still being built though, they are cheaper.

The should lower the baht much more, only then will Thailand become attractive again. Almost everything (except kao pad) is cheaper in Europe these days, even sex.

[Eric Loh]

The declining baht not only the sole reason. My imports have declined by half and much due to the slow economy. I will be more than happy to take a lesser profit if only I have sales.

The baht is 'stabilising' read strengthening and most certainly hasn't 'declined steeply'

I guess you just exited your cave about a week ago.

No, I just read the BP's financial news this very morning. You?

You will never get a job as an accountant.

[Srikcir]

The deflating baht will put a lot of pressure on the BOT to make another rate cut before year-end.

It might be advisable for the current government to delay borrowing funds for large projects from foreign countries that extend debt service out 20 years. Instead focus on using 10-year treasury bonds and cash for domestic investment to quickly reduce household debt and increase domestic consumption.

[Thai at Heart]

If ever there was proof that a devaluation will not bring the desired jump in exports this is it.

A country cannot devalue itself to growth in the long term. It needs to gain productivity to really generate wealth or grow gdp. A huge proportion of the value of Thailand exports require imported inputs. The amount of value added in thailand is relatively low. Inputs are imported, processed, or put together in Thailand. The amount of local inputs from raw materials to say intellectual in out such as design is low.

Devalue the baht, exports get cheaper but imports get more expensive. The profitable bit for Thailand in the middle doesn't change.

Devaluing the baht unless it is a catastrophic fall like 97, won't jump exports. But who wishes a catastrophe on a country such as 97 just to get more export growth. Lest we forget, the reason exports jumped so massively is that exporting companies jumped into Thailand after 97 to take advantage of low wages.

[Praematura]

External factors... No it's the masses are broke.

[ozyjon]

I'm in Europe, the only people making money are the

big grocery shops and now the big story hitting the

news is the bacon, sausages and processed meats

can cause cancer ? What will happen to pork sales

around the world i wonder ?

[Thian]

I'm in Europe, the only people making money are the

big grocery shops and now the big story hitting the

news is the bacon, sausages and processed meats

can cause cancer ? What will happen to pork sales

around the world i wonder ?

pig-smiling-with-eat-fish.jpg

Well then the Thai can export more chicken to europe. But also Europe doesn't mention that meatballs are still good to eat, also on bread the next day. So it seems to me they only want us to stop eating meat.

devaluating the baht will sure improve tourism from Europe. Also all-in resorts will. Tourists just like to know how much a holiday costs and don't want to feel cheated.

Also Thailand is just getting too expensive, they need more big company's and more competition. Also internetshops are still not availlable here, not of the quality Europe has now. They work very well and efficient.

Thailand also needs to improve it's quality, "made in Thailand" is a sign for "will be broken soon". They can use terms like "german technology" as much as they like but i even don't believe them anymore.

And imported goods in Thailand cost 3 times more then overseas. Even simple things like sandals or slippers while they can sell them much easyier here. That is real slippers like Fitflops, not the 50 baht versions. Fitflops cost 65 euro in the EU and 4-5000 baht in Thailand.

That whole importtax should be stopped, what do the Thai get back from that extra income for the government? More civil servants who don't do their job and only are corrupt. I know many Thai who even fly to Europe to buy a few Louis Vuiton purses and then bring them back. They should be cheap in BKK so Asians all flock here to buy them.