Thailand’s export growth slowed in December, a sign the surge in global demand that lifted Asian economies earlier in 2010 may be starting to ease.
Overseas sales increased 18.8 percent last month from a year earlier to $17.4 billion after rising 28.5 percent in November, the commerce ministry said in Nonthaburi province on the outskirts of Bangkok today. The median estimate of 11 economists in a Bloomberg News survey was for a 16.3 percent gain. Exports climbed 28.1 percent to $195.3 billion in 2010.
Sovereign credit woes in Europe and a U.S. job market where unemployment has exceeded 9 percent since May 2009 are damping the prospects for Asian exports after a global economic rebound last year. Thailand’s finance ministry predicts gross domestic product will grow 4.5 percent this year, slowing from an estimated 7.8 percent pace in 2010.
“It is hard to replicate last year’s exceptional growth,” Commerce Minister Porntiva Nakasai said today. “China’s economy, which is the main growth driver in the region, is slowing, while Europe is still having financial problems.” Exports are expected to grow about 10 percent this year, she said.
Thailand joined neighbors from Malaysia to China in increasing interest rates last year as Asia rebounded from the 2009 global recession. The Bank of Thailand last week raised the nation’s benchmark rate by a quarter of a percentage point to 2.25 percent, its fourth move in seven months, and signaled it will boost borrowing costs further to contain inflation.
Growth in Southeast Asia’s largest economy after Indonesia will be “more balanced” this year as local consumption and investment will drive the economy while exports ease, central bank Governor Prasarn Trairatvorakul said last month. The central bank is scheduled to review its economic growth forecast for this year on Jan. 21.
Imports rose 11.5 percent in December. Thailand had a trade surplus of $1.3 billion last month, compared with a $408 million surplus in November.
“The number is pretty good and this indicates the economy itself remains steady,” said Satoshi Ushijima, vice president of the treasury division in Bangkok at Mizuho Corporate Bank Ltd. “This also means there will be more demand to buy the baht than to buy the dollar from the corporate side in the longer-run.”
The baht extended gains after the report, rising 0.1 percent to 30.54 per dollar as of 4:13 p.m. in Bangkok, according to data compiled by Bloomberg.
The baht reached a 13-year high of 29.46 a dollar on Nov. 10 last year. The currency has climbed more than 7 percent in the past 12 months, rising along with most Asian currencies as investors sought better returns in emerging markets, where growth and interest rates are higher than in developed economies such as the U.S. and Europe.
Shipments of electronics products may rise as much as 12 percent this year, down from an estimated 20 percent pace in 2010 as the stronger baht makes Thai products more expensive, the Bangkok Post reported on Jan. 5, citing the chairman of the electronics, electrical and allied industry club of the Federation of Thai Industries.
“We may start to feel the impact from the weakening economies of key industrialized countries,” Pornthep Jubandhu, an economist at Siam Commercial Bank Pcl in Bangkok, said before the report. “The high base effect from last year will also play a key role in growth this year. Our year-on-year export growth in 2011 is expected to fall from last year by half.”