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28 May 2010

Thai Economy

Exports Decelerating in April: Keep Watching Global Risks and Political Fallout (Business Breif No.2830)

Thai exports in April 2010 were valued at USD14.091 billion, growing 35.2 percent YoY, decelerating from their highest growth in 20 months at 40.9 percent in March. Meanwhile, the value of exports excluding gold dropped dramatically to 26.6 percent growth, versus 43.6 percent in March. Also, the April export value contracted 2 percent, (seasonally-adjusted MoM.)
Imports in April, nevertheless, were valued at USD14.357 billion, growing 46.0 percent YoY, against the 59.7 percent growth in March. This relatively high import figure resulted in a trade deficit of USD266 million for April, which is our first trade deficit in 17 months.
Our decelerating export performance for April may be most affected by the falling export value of electronic products, one of our major export items. In April, this product grew only 7.3 percent YoY, against 46.6-percent growth in March and 52.7-percent growth during 1Q10. Exports of garments and some food items, such as rice, canned and processed seafood and processed chicken, also contracted. However, there were some export products with satisfactory growth, e.g., automotive vehicles and parts, electrical appliances, plus rubber and products.
It should also be noted that the majority of our traditional and emerging export markets have seen decelerating shipments. Although overall new market performance featured growth of 48.4 percent in April (up from 33.5-percent growth in March), exports excluding gold to new markets decelerated to 32 percent growth, against the 38-percent growth in March.
Due to the fact that our exports, excluding gold, exhibited sharp decelerations, KASIKORN RESEARCH CENTER (KResearch) views that the overall export trend should be closely monitored. However, exports in 2Q10 will likely grow around 30 percent, close to the 1Q10 figure due to the low base of last year. Then, we will maintain our previous export forecast unchanged at 17.0-24.0 percent growth over 2010, but there are many issues that should be monitored:
- Export figures in coming months: Relevant parties should heed the decelerating export trend seen in April and ascertain whether it is only a temporary phenomenon, or may get worse in the future.
- Greece's debt problem and the probability of a Chinese economic deceleration: Prolonged problems may affect our exports to Europe and Asia.
- Baht appreciation: This factor may affect food and ready-made apparel, which experienced contracting sales in April.
- Impact of political unrest: Although this will not directly affect our exports, unexpected fallout may block our export performance somewhat.

Thai Economy