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21 Jan 2009

Thai Economy

December Exports Contract 14.5 percent, Double-Digit Contraction Possible in 2H09 (Business Brief No.2409)

The latest international trade data released by the Ministry of Commerce on January 21, 2009, has shown that Thailand's exports in December 2008 continued severe contraction. KASIKORN RESEARCH CENTER (KResearch) projects that the impact of global recession toward Thailand's exports may continue to intensify at least throughout 1H09. The important points include:
  • Thai exports in December 2008 were valued at USD11,604.9 million, falling 14.5 percent YoY. This contraction was actually a slight improvement over the contraction of 20.5 percent in November, that falling to the lowest level in more than 6 years. Thai imports in December were valued at USD 11,254.8 million, falling 6.5 percent against the growth of 2.0 percent in November. This resulted in the December trade balance being in surplus at USD350.1 million. Overall in 2008, Thai exports totaled USD177,841.3 million, growing 15.6 percent YoY, while imports were valued at USD178,653.1 million, growing 27.6 percent YoY, translating into a deficit of USD811.9 million.
  • Many key export categories contracted drastically. The highest export contraction was seen in computers, related equipments and parts, falling 32.8 percent; that was followed by automobiles plus equipment and parts, falling 24.3 percent. Taking important export markets into account, both major and emerging markets were seen to be subsiding steadily.
  • An important factor causing Thai exports to fall continuously has been the weakening economies in many regions globally. Other countries in Asia have also experienced contracting exports since November. Thailand is more fortunate than some other countries whose exports are largely electronics, whereas Thai exports run the gamut of categories.
  • Amid the likelihood that the global economy will face recession into at least the next 3-6 months, KResearch expects that exports in 1H09 will likely continue contraction at a double-digit rate of perhaps 11.0-14.0 percent. Exports may take some time to resume growth, hopefully in 4Q09, if the global economy begins to signal recovery in 2H09. In an overview of 2009, KResearch expects exports to contract 3.0-7.0 percent.

Points that we should pursue in further analyses would include the result of proactive economic stimuli taken in many economies, particularly the progress of President Barack Obama's sweeping stimuli after taking office. Domestically, improved political stability will facilitate the implementation of proactive Thai export stimulus policies. Though the Thai government has budgetary limitations, concerted cooperation from all is hoped to increase our export opportunities.

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