Thailand’s exports rose 7.68 percent in May from a year before as industry continued to recover from last year’s floods but imports rose, too, as factories replaced damaged machinery and the trade account was in deficit for the third month in a row.
Deputy Commerce minister Poom Sarapol told a briefing on Monday that his ministry expected exports to improve in the second half of the year and was therefore sticking to its export growth forecast of 15 percent for 2012.
Given the slowdown in the global economy and problems in the euro zone, economists were sceptical. Benjarong Suwankiri at TMB Bank forecast 7 to 9 percent at best despite good demand from neighbouring countries in the Association of South East Asian Nations (Asean).
“Asean has been the driver for this year’s exports throughout. It is great to see that China is coming back from its slowdown in terms of Thai exports, but that needs to be monitored closely since the Chinese economy is still showing weak signs,” he said.
The Commerce Ministry said exports to China rose 22.3 percent in May from a year earlier after 16.5 percent in April.
In the first five months of the year, total exports were down 1.47 percent from the same period in 2011.
Bank of Thailand officials have recently forecast export growth of around 8 percent this year after 16.4 percent in 2011.
Imports rose 18.17 percent in May from a year earlier. For a table, click
The trade deficit in May was $1.74 billion after $2.87 billion in April.
The Bank of Thailand left its benchmark interest rate unchanged at 3.0 percent for a third meeting this month to help businesses still struggling in the aftermath of the floods that devastated big industrial zones last October.
With inflation broadly under control, economists expect rates to be left steady all year to help industry. The central bank has said it has scope to loosen policy if problems in the euro zone get worse and threaten exports.
Thailand’s economy is heavily dependent on exports, which are equivalent to more than 60 percent of GDP each year. Industrial goods usually account for about 65 percent of shipments.
Thailand is the top car maker in Southeast Asia and the world’s second-largest maker of hard disk drives. Many big car and electronics firms were hit hard by the floods.
Thailand is also the world’s biggest rice exporter, although in the first five months of 2012 shipments were 54.3 percent lower than in 2011. Economists have blamed a government intervention scheme that has pushed up the price of Thai grain and made it uncompetitive. -By Amy Sawitta Lefevre and Kitiphong Thaichareon