Sunday, September 21, 2008

Thailand's growth slowing down as global demand cools


Thailand's export growth slowed in August as cooling global economies reduced demand for rice, rubber, electronics and automobiles. The dollar value of shipments abroad increased 14.9% from a year earlier to US$15.9 billion.

The growth rate was much lower than the 43.9% year-on-year pace to a record $16.96 billion in July.

Siripol Yodmuangcharoen, the permanent secretary of the Commerce Ministry, said declines were notable in electronics, machinery, furniture and parts.

However, shipments of agricultural and agro-industrial products in August rose in value by 41.1% year-on-year to $2.788 billion.

Rice exports rose 120% to $554 million, with rubber up 35% to $705 million and frozen and cooked chicken up 76.6% to $147 million.

Industrial product exports rose 11.2% to $12.03 billion, mostly from automobiles, jewellery, refined oil, crude oil, rubber products, toys and lenses.

Import growth slowed by 26.9% year-on-year to $16.7 billion last month, compared with a 55% gain in July, when world oil prices were at record highs

An increase was mainly due to rising fuel and gold imports. The trade deficit narrowed to $782 million in August from $1.03 billion a month earlier.

For the first eighth months of this year, Thailand's exports were worth $120.05 billion, a rise of 24.5% from the same period last year, accounting for 70.2% of the country's export target. Imports for the period totalled $122.93 billion, a rise of 35.4%, resulting in a deficit of $2.87 billion.

Somphob Manarungsan, an economist at Chulalongkorn University, said Thai exports were slowing in line with cooling demand in the US, the United Kingdom, Japan and Germany which accounted for about two-thirds of the world economy.

''Thailand should be cautious that new markets such as Latin America, Russia, Africa and China may also import less in the remaining months, as the prices of commodities such as oil, metal, agricultural products including copper, rice, and maize start to drop. That means those countries will have less income to buy imported goods,'' he said.

''As exports and agricultural products play an important role in the Thai economy, given the downward trend, the government must do something to build up confidence of consumers through the right economic management policy.''

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