Thailand’s exports rose more than economists estimated in January as a global recovery boosted demand for rice, seafood and electrical appliances, reducing pressure for further interest-rate cuts.
Overseas sales increased 16.1 percent last month from a year earlier to $18.3 billion after climbing a previously reported 13.5 percent in December, the Ministry of Commerce said in a statement today. The median estimate in a Bloomberg survey of 17 economists was for a 13.4 percent gain.
Thailand joined neighbors Malaysia and Singapore in reporting stronger-than-estimated economic growth last quarter, adding to signs the region is rebounding from a global slowdown. The Bank of Thailand last week held its key interest rate for a third time and said it expected a “gradual recovery in exports” this year, resisting the government’s calls to reduce borrowing costs to cool the baht’s gains.
“There are positive signs in the global economy, especially in Asia, and that will help sustain export growth,” Thanomsri Fongarunrung, an economist at Phatra Securities Pcl in Bangkok, said before the report. “The risks to growth have lessened. There is no solid economic reason to cut the rate. Still, the central bank may face political pressure again if the baht strengthens further.”
Finance Minister Kittiratt Na-Ranong has renewed calls for further rate cuts to discourage inflows that have boosted the baht to be the biggest gainer this year among 11 widely-traded Asian currencies tracked by Bloomberg. The baht was little changed at 29.83 per dollar as of 1:31 p.m. in Bangkok today.
Imports climbed 40.9 percent in January from a year earlier as factories stepped up output after recovering from the floods of 2011. The trade deficit last month was $5.5 billion, the widest shortfall since at least 1991, today’s report showed.
“Strong domestic demand, which is shown by a much stronger import number, means Thailand’s growth is going to be more sustained,” said Enrico Tanuwidjaja, an economist in Singapore at Royal Bank of Scotland Group Plc. The trade deficit “is actually indicating that much larger imports should support the domestic demand story, in particular investment.”
Gold imports more than doubled to $2.71 billion in January from a year earlier, the highest since September 2011, Vatchari Vimooktayon, permanent secretary for commerce, told reporters.
“It’s not unusual,” Vatchari said. “Whenever the Thai baht strengthens and gold prices fall, gold imports tend to rise. Thai people love gold and accumulate gold.”
Aircraft purchases by Thai Airways International Pcl and raw-material and machinery imports also added to the trade deficit in January, Vatchari said.
Overseas shipments of agricultural products rose 7.2 percent last month from a year earlier, led by rice, tapioca and seafood, according to the commerce ministry. Exports of industrial products rose 21 percent, boosted by electronics, electrical appliances and automobiles, it said.