Saturday, June 20, 2009

Thailand's Export likely to shrink by as much as 19%

Thailand's exports will likely contract by 15-19 per cent this year, as May shipments dropped another 26.6 per cent year on year, says the Commerce Ministry.

This latest projection is in sharp contrast to the previous target of zero to 3-per-cent export growth, as the May figures represent a seventh consecutive month of declines.

Shipments dropped to a combined value of US$11.65 billion (Bt398 billion), the lowest in more than a decade.

Commerce Ministry permanent secretary Siripol Yodmuang-charoen said the downtrend resulted from the global economic recession and increased protectionism in key markets.

US and Chinese campaigns for their citizens to buy only local products have also made it more difficult to boost Thai exports, he explained.

Other negative factors include rising global oil prices and the baht's appreciation.

Siripol said the government would cut some import tariffs on raw materials for the electronics and automobile industries while making available a packing-credit injection for exporters in 25 potential markets.

There will also be a buyer's credit facility to promote sales of Thai goods.

Siripol said exports would likely continue their decline until the third quarter. Shipments could return to positive growth in the fourth quarter if the global economy recovers.

Exports in the first five months fell 22.95 per cent year on year to $55.8 billion. May imports plunged 34.7 per cent year on year to $9.25 billion.

However, Thailand logged a trade surplus of $2.4 billion last month, while the trade surplus in the first five months reached $10.54 billion.

May figures showed exports dropped across the board, with the farm sector down 26.9 per cent and the industrial sector 25.2 per cent.

Department of Export Promotion director-general Rachane Potjanasuntorn said May's exports had dropped largely because consumers were being cautious. In addition, exporters and foreign buyers have liquidity problems.

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