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17 Oct 2008

Thai Economy

September 08 Exports: Growing well at 19.4%, but still prone to global economic recession (Business Brief No.2325)

On October 17, 2008, the Ministry of Commerce reported international trade data for September 2008, with key points summarized in the text below:
- Thailand's September 2008 exports posted higher-than-expected growth of 19.4 percent, YoY (against 14.9 percent growth in August) to reach USD15,868.6 million. Meanwhile, imports expanded 39.4 percent (against the growth of 26.9 percent in August) to USD15,735.3 million. Although import growth was much higher than exports, Thailand managed a trade surplus of USD133.3 million, being the first time since recording deficits for two consecutive months.
§ Export categories showing favorable growth included rubber, iron, steel and steel products, plus rubber products and chemicals. However, sluggish export growth was seen in computers, related equipment and parts, formerly among Thailand's top export categories. Other exports that saw slowing growth included gems and other jewelry, integrated circuits, plastic pellets, etc. Major Thai exports to key markets were still performing well, with the US market growing 10.4 percent, EU growing 10.1 percent, Japan growing 20.3 percent and ASEAN growing 28.0 percent. Exports to new markets grew at an average of 21.2 percent, with the exception of China that saw our exports dropping 6.1 percent.
- During 9M08, Thai exports totaled USD135,926.1 million, up 39.4 percent, beating the 23.9 percent of 9M07. Meanwhile, imports totaled at USD138,668.6 million, growing by 35.8 percent over –year, translating to a deficit of USD2,742.4 million.
- KASIKORN RESEARCH CENTER (KResearch) expects that Thai exports during 4Q08 will likely decelerate due to the economic downturn in key markets as a result of the global financial crisis amid a rapid cyclical downward trend in commodity prices. Nonetheless, the high export growth in 9M08 will help spur overall Thai exports to reach around 20 percent growth, which would be higher than the 17.3 percent growth of 2007.
- Thailand's exports in 2009 may encounter certain challenges, including the likelihood that the world's major economies, the G3 countries, i.e., the US, EU and Japan, might be on the brink of recession. Also, the International Monetary Fund (IMF) has projected that the world economy will grow only 3.0 percent in 2009, (against the growth of 3.9 percent in 2008) which would be the lowest growth achieved in seven years.
- KResearch expects that the global economic downturn will decelerate Thai exports in 2009, achieving only a growth of around 5.0-10.0 percent, against the growth of 20 percent in 2008. However, concerted efforts by the government and private agencies are needed to help lessen this adverse impact. Most importantly, Thailand must seek the opportunity to expand exports of various good quality products in the wake of global concern about sanitary standards.

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