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Published on September 1, 2007

The Finance Ministry has promised to cut import duties and deregulate export procedures to lower costs for exporters.

Deputy Finance Minister Sommai Phasee yesterday said the ministry would conclude the duty-cut package in October.

Tin plate is among the raw-material goods that are under consideration for a tax reduction, Sommai said after meeting with a member of the National Legislative Assembly's committee on trade.

He also said exporters had been hard hit by the appreciation of the baht this year. However, as the pressure on the baht is now easing, exporters are quite satisfied with the rate of Bt34.35 per US dollar.

In other news, Chavalit Sethametikul, director-general of the Customs Department, said his agency would offer a single-window service to reduce time and costs for exporters.

Exporters will not need to ask permission from relevant government agencies as in the past, he said.

Meanwhile, according to data from the Bank of Thailand (BOT), economic performance was somewhat gloomy in July as a result of sluggish exports and fragile domestic demand, although higher production for both domestic and export markets boosted the hope for an acceleration of economic engines for the rest of the year.

The Private Consumption Index in July decreased one per cent from the previous month, compared with a one-per-cent increase in June. Motorcycles plunged by 11.1 per cent, much higher than the contraction of 2.3 per cent in June.

BOT senior director Amara Sriphayak said the index slowed down slightly from June, but remained on an upward trend since the beginning of the year.

The Private Investment Index posted one-per-cent growth from July, as it did last month. Commercial car sales rose 2 per cent, compared with a 0.8-per-cent contraction in June.

"We cannot analyse a long-term outlook from a single month's data, but there are many positive factors in the second half of the year to boost the economy, such as clearer politics and low interest rates," said Amara.

In July, exports grew at a slower pace of 6.2 per cent, compared with 18.1 per cent in the previous month. This was the result of decreasing growth of 3.6 per cent in prices and 2.5 per cent in quantity. Exports in baht terms contracted by 5.8 per cent from July last year.

The export of goods slowed down in every sector, particularly in the agricultural sector - at 7.5 per cent.

Amara said the economic slowdown of trading partners was the main reason for the decreased exports, and the appreciating baht played a

partial role in the results.

Thanks to the declining growth of imports of 3.7 per cent, the trade account still marked a slight surplus of US$40 million (Bt1.38 billion) in July. The service and transfer accounts of $300 million helped the current account to be in surplus by $400 million.

Amara is optimistic about the future improvement of exports and domestic demand as the manufacturing production index in July expanded by 7.2 per cent, higher than 4.4 per cent in June.

Production for export rose 14.8 per cent, compared with 12.5 per cent in June. That for the domestic market grew 2.5 per cent, compared with flat growth in the previous month.

Wichit Chaitrong,

Anoma Srisukkasem

 The Nation