Some exports start to recover

A glimmer of good economic news has appeared, with indicators suggesting some sectors are starting to recover from the global downturn, the Finance Ministry said yesterday.

There were signs indicating the processed-food, electronics and electrical home-appliance industries took initial steps towards recovery in March, ministry spokesman Ekniti Nitithanprapas said.

He said economic recovery in China, the Middle East and Africa - important new markets for these three sectors - had contributed to the improved picture.

"We should not be laid back just yet, since the figures cover only the past two months. The US and Japanese economies are still struggling," he said.

"However, China, the Middle East and Africa are doing much better amid the global recession, so the government should help facilitate the shifting of resources to back the recovery of growth sectors."

Shipments of processed-food exports in January contracted by 8.2 per cent year on year, but February and March figures showed growth of 4.6 per cent and 2.8 per cent, respectively.

Moreover, exports of frozen chicken, seafood and canned tuna are expected to have windfall gains from the outbreak of swine flu, said Ekniti.

Exports of electronics also showed some improvement, as the pace of contraction slowed from year-on-year growth of minus 42.1 per cent in January to minus 27.4 per cent last month.

Exports of electrical home appliances also moved in the right direction, growing at minus 29.4 per cent in March, against minus 34.3 per cent in February.

The huge stimulus package implemented by the Chinese government has boosted demand for Thai exports, he said.

Exports to China shrank 14 per cent year on year in March, against contractions of 40.1 per cent and 28.9 per cent in January and February, respectively.

Exports to the Middle East expanded 1.6 per cent and 3.3 per cent in February and March, against a contraction of 5.9 per cent in January.

Exports to Africa expanded 4.9 per cent and 17.6 per cent in February and March, versus growth of minus 25.1 per cent in January.

Exports of jewellery and steel products to Australia expanded last month despite

a 1.4-per-cent contraction of overall export growth to the country, sharply down from

the 49.7-per-cent year-on-year growth recorded in February.

Meanwhile, the unemployment rate showed signs of easing, standing at 1.9 per cent in February, down from 2.4 per cent in January, due partly to labour demand in recovering sectors.

Ekniti said unemployment was, however, still an issue of concern.

He said public spending had also been gathering momentum, which should boost domestic consumption in the months ahead.

Capital spending by the government between January and March rose 14 per cent year on year to Bt100.1 billion, while current spending on routine operations of state agencies increased 44.7 per cent to Bt423 billion.

Domestic consumption and private investment, however, showed a further decline in the first quarter.

Collection of value-added tax - a key consumption indicator - was sharply down by 19.2 per cent year on year, against a 0.1-per-cent expansion in last year's fourth quarter.

Imports of capital goods - a private-investment indicator - contracted by 23 per cent year on year.

The Finance Ministry maintains its forecast of economic contraction between 2 and 3 per cent this year. It will review its forecast in June, when it will take into account the impact of swine flu, the latest world economic situation and the most recent political developments.