Thailand’s exports rose the most since July 2008 as the global recovery boosted orders, helping to offset the economic fallout from the political unrest in April and May.
Shipments jumped 42.1 percent in May from a year earlier to $16.56 billion, Commerce Minister Porntiva Nakasai said in Nonthaburi province on the outskirts of Bangkok today. The median estimate of eight economists in a Bloomberg News survey was for a 34 percent gain. Exports surged 35.2 percent in April, according to previously reported figures.
The Bank of Thailand said this week the impact from the nation’s worst political violence in almost two decades has been “limited” on the economic rebound, and that it may be the “appropriate” time to raise interest rates. Companies including Stars Microelectronics Thailand Pcl expect revenue to increase this year on higher demand.
“Exports remain strong, which will help support the whole economy,” Thanomsri Fongarunrung, an economist at Phatra Securities Pcl in Bangkok, said before today’s report. “The economy in the second quarter will be affected in some industries, particularly tourism, but shipments and local spending should help boost growth.”
The government may raise its 2010 export-growth target from the current 14 percent, after evaluating the June trade data to gauge the impact from Europe’s debt crisis, Porntiva said today.
“The export performance so far is very good,” she said. “The global economy has recovered, including the U.S., Japan, China” and Southeast Asia.
Thai consumer confidence rose for the first time in four months in May on optimism the nation’s economic recovery won’t be derailed by anti-government protests that ended last month. Prime Minister Abhisit Vejjajiva is working on a reconciliation plan after the demonstrations led to clashes and riots, claiming 89 lives in two months. A state of emergency is still in place in many provinces, including Bangkok, to maintain order.
The tourism industry may recover within six months, based on its performance after previous crises, and the broader economy will improve in the third and fourth quarters, aided by the global recovery and an easing of fiscal and monetary policy, Deputy Governor Bandid Nijathaworn said today in Bangkok.
“The need for us to use the extremely accommodative monetary policy will be lower,” Bandid told reporters. The central bank will assess economic data and inflation pressures before reviewing its interest rate policy on July 14, he said.
Rate Increase ‘Possible’
The central bank on June 2 kept its benchmark interest rate at 1.25 percent, the lowest level since July 2004. Still, Assistant Governor Paiboon Kittisrikangwan said “it’s possible” for Thailand to consider raising the rate at the next meeting if the nation’s political problems and Europe’s debt woes ease to an “appropriate level.”
Imports climbed 55.1 percent in May, the sixth consecutive month of gains, as the economic recovery boosts demand for raw materials and consumer goods. The nation reported a trade surplus of $2.21 billion, compared with a $266 million deficit in April.
The Thai baht was little changed at 32.41 per dollar as at 12:03 p.m. local time. It has climbed 2.7 percent this year, the third-biggest gainer in Asia.
Thai exports grew 34.5 percent in the first five months of the year, the ministry said. Sales to the U.S. gained 26.7 percent in May, accelerating from 12.5 percent in April, while shipments to Europe rose 19.3 percent, up from 15 percent. Exports to China jumped 39.4 percent compared with a 26.9 percent increase in April.