Thai Export Growth Slows as Cooling Global Economy Curbs Electronics Sales
Thailand’s exports rose at a slower- than-expected pace in July as demand for electronics and rice eased amid signs of cooling global growth.
Shipments increased 20.6 percent last month from a year earlier to $15.57 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 37.1 percent gain.
Thailand joined Singapore in reporting slower export growth last month amid signs the global economy is weakening. Rising overseas orders in the second quarter helped Thailand’s economy weather a slump in tourism and local demand during deadly political violence in April and May.
“Exports started to reflect real demand after inventory restocking was completed in the first half,” Thanomsri Fongarunrung, an economist at Phatra Securities Pcl in Bangkok, said before the report. “We are quite concerned about more signs of weakness in the global economy. This may lead to worse- than-expected growth in the fourth quarter.”
Governments in Europe are embarking on austerity programs to cut budget deficits, and households in some of the world’s largest economies are holding back spending, clouding the outlook for the global rebound that has lifted Asian exports.
The baht has climbed 2.2 percent this month, making it the best performer among the 10 most-actively traded currencies in Asia, excluding Japan. Central bank Governor Tarisa Watanagase said yesterday she’s “not concerned” that a stronger baht will hurt exports because it has moved in line with regional peers.
The Thai baht’s strength is a “risk” to the country’s overseas sales, and exporters are concerned that the currency will strengthen to 30 baht against the dollar, Porntiva said. The central bank should “take care” of the baht and try to “stabilize” it, the minister said.
The Bank of Thailand raised its benchmark interest rate to 1.5 percent on July 14, the first time in almost two years, after political protests ended in May without derailing the economy. Policy makers will meet again next week to decide whether to further increase the key rate.
Imports climbed 36.1 percent in July, the eighth consecutive month of gains, as the economic recovery raised demand for raw materials and consumer goods. The nation reported a trade deficit of $940 million last month, compared with a $2.32 billion surplus reported in June.
The ministry last month raised its export growth target to no less than 20 percent after exports surged 46 percent to a record $18.04 billion in June.