Thai August exports fall for 8th month, scant signs of recovery

Thailand, south-east Asia's second-largest economy, has struggled to regain momentum since the army seized power in May 2014 to end months of political unrest.
Thailand, south-east Asia's second-largest economy, has struggled to regain momentum since the army seized power in May 2014 to end months of political unrest.PHOTO: BLOOMBERG

BANGKOK (REUTERS) - Thailand's exports in August contracted for an eighth straight month, more evidence the trade-reliant economy remains mired in the doldrums after more than a year of military rule.

South-east Asia's second-largest economy has struggled to regain momentum since the army seized power in May 2014 to end months of political unrest. Although last year's coup restored some stability, exports and domestic demand remain weak.

Exports in August slipped 6.69 per cent from a year earlier, while imports declined 4.77 per cent, the Commerce Ministry said on Monday (Sept 28). Both figures were about twice as bad as forecast.

"The numbers are lower than market expectations and our estimates, indicating there is no export recovery in the near term," said economist Pimonwan Mahujchariyawong of Kasikorn Research Centre. "If there is no sign of a recovery in the coming months, there is a chance that exports may contract more than BOT's (Bank of Thailand) forecast," she added.

Thai exports are expected to shrink for a third year running in 2015 in spite of weakness in the baht. The currency has fallen 9.3 per cent against the US dollar so far this year. The central bank last week forecast that exports would shrink 5 per cent this year, the biggest fall since 2009.

The ministry blamed a slow global economy plus low oil and commodity prices as the main factor for August's poor exports.

Economists in a Reuters poll had predicted exports would fall 3.0 per cent and imports would drop 2.5 per cent.

Ministry official Somkiat Triratpan told a news conference it was difficult to predict how exports would perform but said there was reason to be optimistic.

"We are hoping that automobile shipments will increase, judging from a surge of more than 40 per cent in imports of car parts. Exports usually follow imports within one or two months."

Many imported materials are assembled into completed goods and shipped out again.

The ministry maintained on Monday that exports would contract 3 per cent this year. Exports account for more than 60 per cent of the economy.

August exports to China rose 0.4 per cent while shipments to Japan fell 6.7 per cent. Exports to Europe declined 2.3 per cent and those to the United States dropped 1.9 per cent.

Exports of key industrial goods fell 3.2 per cent.