NEW DELHI: Commerce Ministry officially slashed this year’s export-growth target from 4 per cent to 1.2 per cent, for a total value of US$230.30 billion (Bt7.5 trillion). That translates to a loss in export value of about $6 billion from the previous projection of $236.67 billion.
However, the ministry and private-sector analysts share the hope that the export decline bottomed out in February, as March exports declined by only 4.45 per cent, compared with 6 per cent year on year in the previous month.
The ministry’s lower target now is more in line with other economic agencies’ growth projections, which range from 0-1.4 per cent.
Exports in March were valued at $18.88 billion, while imports dropped 5.89 per cent to $17.39 billion. Exports in the first quarter were down 4.69 per cent year on year to $53.36 billion, while imports dropped 6.43 per cent to $51.93 billion. Thailand locked in a trade surplus of $1.42 billion in the January-to-March period.
“Exports should have hit their lowest point in February on uncontrollable factors, mainly lower oil and gold prices. However, Thailand’s share of many export markets has increased, showing that there is still room for export growth,” said Chutima Bunyapraphasara, permanent secretary of the Commerce Ministry.
Factors causing lower exports include the sluggish global economy, fluctuating exchange rates, dropping crop prices, rising non-tariff barriers, shortages of labour and raw materials, and the shifting abroad of some Thai industries.
Gold imports increased while exports sank in the first three months as the lower gold price encouraged more import for speculation.
The ministry’s new export-growth projection of 1.2 per cent is a working target, as its own studies suggest a growth figure of about 0.5-1 per cent.
The official projection assumes that the average oil price will be $70 per barrel in the second half of the year, the baht will be valued at 32.6-33.4 against the US dollar, and agricultural prices will be unchanged from last year.
Chutima said exports should continue to recover in the remaining months as the economies of many markets have shown brighter signs of recovery, particularly the United States.
The proportion of Thailand’s exports to the US grew from 1.16 per cent last year to 1.21 per cent in the first two months of 2015, and to Japan rose from 2.68 per cent to 3.07 per cent. The export proportion to India improved from 1.23 per cent last year to 1.39 per cent in January.
Despite declining shipments to China, the export share to this market increased from 1.95 per cent last year to 2.2 per cent in the first quarter of 2015.
Isara Vongkusolkit, chairman of the Board of Trade and the Thai Chamber of Commerce, said exports had shown positive signs of recovery. However, the baht is still too strong against its rivals, which will continue to affect Thai export competitiveness.
He said Thai enterprises urgently needed to adapt their export strategies to focus more on emerging economic markets, mainly neighbouring countries and southern China.
