Export value plunges for second straight month as concern grows over major setback this year

Thailand's exports sank for the second consecutive month in December, in line with the global economic downturn, which will further affect the country's export growth this year.

Last month's exports plummeted 14.55 per cent to a value of only US$11.06 billion (Bt386 billion), due mainly to lower demand for imported goods in most countries and lower product value, particularly for agricultural items.

 In the same period, imports dropped 6.5 per cent to $11.25 billion, producing a trade deficit of $190 million.

Shrinking export growth last month directly affected the Kingdom's full-year export growth, making it only 15.58 per cent to $177.84 billion, lower than a Commerce Ministry estimate of 18 per cent.

Imports increased 27.6 per cent last year to a value of $178.65 billion for a trade deficit of $810 million.

Commerce permanent secretary Siripol Yodmuangcharoen admitted it would be difficult for his ministry to drive export growth to a target of 3 per cent, or even achieve any growth at all this year. The Kingdom is facing the twin hardships of sluggish external economic growth and no additional budget to fund export-growth activities.

With a limited budget and unexpected external factors like slow growth among trading partners, rising oil prices and fluctuating exchange rates, the ministry cannot predict whether exports will grow or drop this year.

"There is huge concern that exports could drop even more severely in the first half of the year, due to the global economic slowdown affecting all industries. However, exports could recover in the second half on the back of trading partners' economic-stimulus measures, particularly in the United States," said Siripol. He said his ministry would be struggling in its attempts to drive export growth, what with its limited budget.

Earlier, the ministry expressed confidence it could increase exports about 3 per cent this year to between $183 billion and $184 billion if it received extra funds.

Department of Export Promotion director-general Rachane Potjanasuntorn said many countries showed lower demand for imported goods in the wake of the global economic meltdown.

"Many countries have delayed their import orders, in particular for non-essential products like electronics and electric appliances, automobiles and plastic products," he said, adding that export value also fell following lower prices for oil and agricultural products.

Exports to all major markets and new target markets also fell last month, by 19.7 per cent and 8.9 per cent, respectively.

Exports to the US, the EU and Japan, Thailand's most important markets, usually accounting for 34.7 per cent of export value, sank drastically last month by 19.3 per cent, 16.3 per cent and 15.1 per cent, respectively.

Exports to new markets also dropped, including by 7.5 percent to Indochina and Burma, 9.2 percent to the Middle East, 18.6 per cent to Africa, 14.9 per cent to Latin America, 29.6 per cent to the Eastern Europe and 40.1 per cent to China.

Exports to only a few markets increased last month. These were Hong Kong, India and other South Asian countries, Australia and Brunei.

Despite falling growth in exports to most markets, Rachane said the Commerce Ministry would continue to focus on promoting exports in new markets of high potential.

So far, of 692 export-growth projects planned by the ministry, 198 have been completed since last year, while another 138 will be launched in the first quarter.