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20 May 2009

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April Exports Contracted 26.1%, But Signals of Improvement Seen Ahead (Business Brief No.2510)

คะแนนเฉลี่ย
Thailand's exports in April 2009 contracted 26.1 percent with a value of USD10,429 billion YoY. This contraction was worse than the 23.1 percent shrinkage in March, which was partly due to a high base effect. Meanwhile, Thailand's imports totaled USD9,834 million, falling 36.3 percent, which was higher than the contraction of 35.1 percent seen in March. Notably, the import value had increased to USD9,455 million in March, being the highest level since January. The higher import value over March along with falling exports resulted in a trade surplus of USD595 million, falling from the surplus of USD2,101 million in February. For overall picture for the first 4 months of 2009 (4M09), exports contracted 21.9 percent, while imports shrank 37.3 percent, translating into a high trade surplus of USD7,650 million, against the deficit of USD812 million in 2008.
Most major exports such as automobiles, equipment and parts; rice; rubber; jewelry excluding gold, had been contracting steadily, but the electronics category with computers, equipment and parts; integrated circuits and electrical appliances showed lower contractions. Thai exports that exhibited a bright growth included sugar, pet food, chemical products, books and printed items, aircraft parts and aviation-related equipment, plus chilled and frozen shrimps. It was found that exports to all major markets continued to show sharp contractions, but Thailand's exports to some of the new markets saw lower contractions in March. Significantly, exports to China have shown slower contraction over the last 3 months, resulting in China being the largest export market in terms of value, outpacing the USA and Japan in April.
Despite the sharp export contraction in April, improving signals may be lying ahead. For example, there are signs that imports of raw materials and intermediate goods improved given the increased values and slowing contractions. This indicates the possibility that there will be increased production and exports soon, conforming with industrialists' opinions that some industries are showing signs of improvement with more orders for electronic goods due to a recovering Chinese economy and trade partners' subsiding inventories following drastic production cuts recently.
KASIKORN RESEARCH CENTER (KResearch) views that the global economy shows stabilizing signs wherein the recession will likely be bottoming out in all regions, however, the current growth is almost imperceptible at the low point of the trough (U-Shaped Recession). Meanwhile, recovery should be apparent in 2H09. Factors determining the speed of economic recovery will include the effectiveness of the economic stimuli of each country – which would help spur employment – and if oil prices do not rise above real demand; the controllability of H1N1 flu outbreak will also influence matters.
For the export outlook, KResearch expects that the export value will improve gradually in the future, but export growth over the next few months will likely contract, as seen in April, due to a high base effect. Overall exports in 2009 are projected to shrink 14.5-19.0 percent YoY. In 1H09, exports may probably contract more than 20 percent. Nevertheless, stable economic recovery will likely help boost exports in 2H09.

Aside from positive factors seen in foreign countries, the Thai authorities will also play a great role toward our recovery, particularly in monitoring the Baht value to maintain the competitiveness of our exports. In addition, measures to help enhance liquidity, loans with low interest rates and logistic improvements such as reduced fees incurred in export procedures are recommended because they would help enhance liquidity and reduce costs for exporters.

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