BANGKOK: Thailand’s export volume is expected to shrink, marginally though, in 2016, against the earlier forecast that had predicted a growth in the segment. The contraction can be attibuted to the continuation of weak external demand that is hampering the nation’s trade prospects.
Exports are seen to shrink 0.3 percent this year, compared to an earlier forecast of 1–2 percent growth. That total exports grew 0.9 percent y/y in the first quarter of 2016 was encouraging, especially after almost eight consecutive quarters of contraction, DBS reported. Further, the contraction in exports is mainly led by dip in gold exports in February along with other intermediate goods, which is less likely to witness any rebound in the first quarter of 2016.
Meanwhile, the auto sector has remained a cause of concern for the Thailand economy, which makes up almost 40 percent of total manufacturing exports. Exports from the auto sector, for example, are down 1.5 percent on year in the first quarter. This is the first contraction since 2009. As it turns out, the economy cannot depend on its auto sector alone any longer, the report showed. Since, external demand remains subdued, domestic demand has to pick pace in the coming months. Private consumption has remained on the upside in the past few months, which is an encouraging factor.
