BANGKOK: Thailand’s exports fell more than expected in December and contracted much more in 2015 than in the previous two years, showing how the trade-reliant economy continues to struggle amid weak global demand.
Persistently poor exports and domestic demand have added to the challenges the ruling junta faces moving Southeast Asia’s second-largest economy forward after seizing power to end political unrest 20 months ago. Exports, worth about two-thirds of GDP, fell 8.73 percent in December from a year earlier, the Commerce Ministry said. A Reuters poll projected a 7.2 percent drop.
The fall was the 12th consecutive one and the biggest for any month since November 2011, when severe flooding forced thousands of factories to shut.
In 2015, exports fell for the third straight year. The annual drop was 5.78 percent, the biggest in six years, compared with falls of less than 0.5 percent in 2013 and 2014. Preventing a bigger 2015 tumble was the key auto industry, as exports of cars and car-parts rose 4.3 percent.
Despite the poor 2015 results, the Commerce Ministry is maintaining a target of 5 percent export growth this year. “Exports could be positive in Q1 due to a low base last year and if oil prices don’t fall further,” said Somkiat Triratpan, a ministry official.
But the Bank of Thailand forecasts zero growth this year. Governor Veerathai Santiprabhob told Reuters last week “We expect quantity to be expanding a bit but that will be offset by declines in export prices.”
Thai exports to China, the second biggest market in 2015 after the United States, slid 9.5 percent from a year earlier in December and by 5.4 percent for 2015. Shipments to Europe rose 2.3 percent in December but fell 5.7 percent for the year. Those to the United States shrank 7.2 percent last month but were up 0.7 percent in 2015.
Imports dropped 9.23 percent in December from a year earlier, and 11.02 percent for 2015. Che-Yu Liang, a director of Ya Thai Chemical Co., which produces surface finishing chemicals for autos and other goods, said China’s slowdown has impacted business.
“Many clients will bargain more to pay less, a 5 to 10 percent discount, but they don’t necessarily buy less from us due to the economy there,” he said. Last month, the central bank cut its 2016 economic growth projection to 3.5 percent from 3.7 percent, and predicted 2.8 percent for 2015. Growth data for 2015 is due on Feb. 15.
