Sluggish economy, drop in exports continues

After short period of rising exports, this month exports fell once again in line with slow pace of world trade.

ECONOMY

Sluggish economy, drop in exports continues

7/12/2016
Phusadee Arunmas

After a short period of rising exports, this month exports fell once again last month.

With the sluggish economy and poor export performance in the second half of the year, the business sector is concerned that Thai economic growth may fail to reach 3.3-3.5% as forecast.

Overall exports remain weak, in line with the slow pace of the world's trade climate.

Domestic economic growth is also quite slow as domestic consumption is still fragile amid cautious spending.

FALLING EXPORTS AGAIN

Exports fell 4.2% year-on-year in October to US$17.78 billion after growing 3.4% year-on-year in September and 6.5% in August, according to a Commerce Ministry report Nov 30.

Officials blamed easing demand from major markets and weaker shipments of gold and oil related products.

AGRICULTURAL EXPORTS FALL

Exports of agricultural and agribusiness products slipped back into contraction after gains in September.

Exports fell 8.1% from October last year to $2.63 billion on lower shipments of sugar, rice, tapioca products and rubber.

INDUSTRIAL EXPORTS FALL

Exports of industrial products fell for the first time in three months, down 2.7% at $14.15 billion, led by finished oil, computers, gold, cars and auto products, steel and TV sets.

In October, imports were 6.5% higher from the previous year at $17.53 billion, producing a trade surplus of $248 million.

For the first 10 months of 2016, exports totalled $178.25 billion, down 1% year-on-year, with imports shrinking 5.9% to $160 billion.

The Commerce Ministry forecast exports to remain at between zero growth and 1% contraction this year.

This is according to Isara Vongkusolkit, chairman of Thai Chamber of Commerce, in his capacity as chairman of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).

FISCAL STIMULUS MEASURES TO BOOST ECONOMY

"Nonetheless, we still hope the government's stimulus measures will help shore up economic growth this year," Mr Isara said.

The Finance Ministry is seeking cabinet approval for holiday tax breaks, which are more aggressive this year, doubling the cap on claimed value to 30,000 baht per shopper.

RISK FACTORS

There are many risk factors looming in the near future, particularly US President-elect Donald Trump's protectionist trade policies, may dampen the global trade and investment climate.

Possible interest rate hikes by the US Federal Reserve are also expected to affect global capital flows and foreign exchange.

Elections will be held in many countries in Europe next year, possibly coming with new trade and investment policies to watch for.


http://www.bangkokpost.com/news/politics/1153325/potential-slowdown-stirs-fears

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