Imported Garments still Rising Despite Spiraling Inflation and Oil prices (Business Brief No.2222)

Thailand's garment imports in the first 5 months of 2008 totaled USD118.3 million, increasing 18.6 percent over the same period of last year, which is in adverse direction to the eroding consumer spending nationally due to surging oil prices and inflation. It is expected that the continual increases in oil prices along with subsiding import costs due to the stronger Baht will help support the importation of garments into Thailand in the last half of the year. However, most of the garments to be imported will be from countries that have low production costs, such as China, Indonesia, India, Vietnam, Cambodia and Laos. These shipments will account for around 60 percent of Thailand's total garment imports to meet growing demand from the low-end segment, which has been hit by the rising cost of living. Imports of fashion clothing from Europe and U.S.A. will also increase among high-end customers who prefer brand name goods. These imports will not only cause Thailand to lose a large amount in foreign exchange earnings while we are facing a trade deficit, at present, but will also adversely affect domestic garment entrepreneurs who are facing stiff competition from both imported and domestically made products.