Copters and gold drive up Thai Feb exports

BANGKOK • Thailand reported that exports grew in February for the first time in 14 months, thanks to two unusual items - helicopters and an eightfold increase from a month earlier in gold shipments.

Last month, exports rose 10.27 per cent from a year earlier, the Commerce Ministry said yesterday.

Imports plunged 16.82 per cent, an indication that exports - traditionally a growth driver in Thailand - remain weak, in spite of the reported rise.

Many imported items are parts assembled into finished goods and shipped out.

Pushing up last month's exports, in the government data, were helicopters and vehicles for military drills of US$683 million (S$936 million) and gold of US$1.89 billion.

Those two items accounted for nearly 14 per cent of total exports of US$18.99 billion.

SECOND-HALF RECOVERY

Exports may contract for another two to three months before turning positive in the second half when commodity prices should start to recover.

MS PIMONWAN MAHUJCHARIYAWONG, an economist at Kasikorn Research, on the data on export

Deputy Commerce Minister Suvit Maesincee said that when helicopters/vehicles and gold are excluded, "normal trade (exports) was down 2 per cent" from a year earlier.

Economist Pimonwan Mahujchariyawong of Kasikorn Research Centre said the data reflects one-off gains. "Exports may contract for another two to three months before turning positive in the second half when commodity prices should start to recover," she said.

Exports, equal to more than 60 per cent of Thai output, have long been weak, one reason why Thailand's military junta has struggled to revive South-east Asia's second- largest economy after taking power in May 2014.

Exports have contracted the past three years, with shipments last year down 5.78 per cent, the biggest annual pace of fall in six years. Domestic demand, another growth driver, has also been sluggish.

The Bank of Thailand expects another contraction this year, a factor in its cutting its 2016 economic growth forecast on Wednesday to 3.1 per cent from 3.5 per cent. The central bank said exports would shrink 2 per cent, rather than be flat.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 26, 2016, with the headline 'Copters and gold drive up Thai Feb exports'. Print Edition | Subscribe