News Room - Business/Economics

Posted on 20 Feb 2009

Exports decline 26.5% in January (Thailand)

The value of Thailand's exports fell in January by the most in 18 years as the deepening global recession curbed demand for Thai and Asian products. Shipments for the month were worth US$10.49 billion, down 26.5% from a year earlier, said Siripol Yodmuangcharoen, the permanent secretary for the Commerce Ministry.

 

The January contraction followed a 14.55% year-on-year decline in December and a 20.47% slide in November. The contraction was the biggest since January 1991.

 

Exports were down sharply almost in all sectors with agricultural and agro-industrial shipments dropping 25.6% to $1.66 billion and industrial goods falling 24.5% to $7.2 billion.

 

Thai shipments also fell to all market destinations. The decline was 28.2% to traditional key markets such as the United States, Japan and Europe, and 26.4% to secondary markets including Hong Kong, Taiwan and South Korea.

 

Even exports to emerging markets seen as having better potential were off 30.6%.

 

According to Mr Siripol, imports also fell in almost all sectors, with energy down 53.4% in value, capital goods down 29.5%, raw materials down 41.9%, consumer products down 17.9%, vehicles and transport down 18.7%.

 

Imports as a result contracted 37.6% to $9.12 billion after a 6.52% decline in December, which had been the first drop since May 2002.

 

''Thailand is not the only country that saw exports fall in January,'' said Mr Siripol.

 

''Shipments of other countries also contracted accordingly. Exports from China, for instance, contracted 17.4%, Japan was down 46.1%, Singapore 37.8%, Vietnam 24.2% and Taiwan 40%. We can't say whether our exports have reached bottom.''

 

In the face of declining exports in January, Mr Siripol said the government might have to revise its export projection for the year, set earlier at 3% growth to $183.17 billion.

 

Ministry officials will meet with Thai Trade Center executives and commercial counsellors on Feb 25 and 26 to re-evaluate strategies for this year.

 

''We are afraid Thai exports will fall further as imports, notably raw materials and capital goods [for production], are shrinking,'' said Mr Siripol.

 

As well, export prices in almost every category have been falling in line with easing oil prices and production costs, noted Rachane Potjanasuntorn, the director-general of the Export Promotion Department.

 

Aat Pisanwanich, director of the Centre for International Trade Studies of the University of the Thai Chamber of Commerce (UTCC), said that given the January figures, Thailand's exports were expected to contract by up to 6% this year.

 

He said a double-digit contraction was even possible if the world economy does not start to show signs of recovery in the third and fourth quarters of the year.

 

''What the government needs to do right now is to conduct scenario planning analysis to evaluate the impact on Thailand's export performance if the world is still in a downturn like this, and examine how much the baht's weakness could help boost exports,'' he said.

 

''We have also to take into account whether the 'Buy American' bill which forbids the use of foreign labour and requires investors to set up companies in the United States would affect Thai exports, and in the worst case, what the government should do to curb that impact.''

 

Narongchai Akrasanee, the Export-Import Bank chairman, urged the government to make more use of free trade agreements under the Asean framework.

 

''Despite the declining purchasing power of Japanese customers, Japan is still promising for Thai goods as we can capitalise on the Japan-Thailand Economic Partnership Agreement (JTEPA) to boost exports,'' he said.

 

''New markets such as Africa and the Middle East and the markets where Thailand has already agreed on free trade agreements, such as India,and Australia, also deserve export interest.

 

Somchai Sujjapongse, the director-general of the Fiscal Policy Office, said that the weak export results were roughly in line with other countries in the region.

 

He added that the FPO had previously forecast that economic growth in the first quarter would fall ''significantly'' if not for the government's economic stimulus programme, due in part to high base effects. Growth in the first quarter of 2008 was 6%.