Thai exports slide 1.48pc, prompting slashed growth projections

THAILAND's exports dropped in July for a third straight month by 1.48 per cent compared to the same month a year earlier, while imports increased by 1.08 per cent, according to data from the Commerce Ministry.

However, the decline in exports was not as sharp as the 3.4 per cent year-on-year drop recorded in June.

In the first seven months of 2013, exports grew by just 0.6 per cent from a year earlier. With exports accounting for about 60 per cent of the economy, a strong export trade is vital for the nation.

"While we still expect exports to improve, the weak July data is not a good sign for export growth this year, which could be lower than 3 per cent. It will have quite an impact on economic growth," economist Pimonwan Mahujchariyawong at Kasikorn Research Centre was quoted as saying in a Reuters report.

Thailand slipped into a mild recession in the first half of the year, as the economy shrank on a quarterly basis in each of the first two quarters. However, the national planning agency is forecasting economic growth in the third quarter on both a yearly and quarterly basis.

Southeast Asia's second largest economy grew by 2.8 per cent in the second quarter compared to the same period last year. But it shrank 0.3 per cent from the first quarter, when it contracted 1.7 per cent.

The Commerce Ministry blamed the July shrinkage on weak global demand, pointing to slowdowns in China and the United States and the euro zone being still in recession last month.

In July exports to China were down 5.3 per cent year-on-year, compared with June's 16.7 per cent decline.

The only market showing growth was Southeast Asia. Thai exports within the region rose by 8.6 per cent in July, up from June's 5.5 per cent year-on-year increase.

The ministry said it would review its 2013 export growth forecast of 7.0-7.5 per cent in September. The Bank of Thailand cut its export growth projection in July to 4 per cent from 7.5 per cent. It also adjusted downwards its economic growth estimate to 4.2 per cent from 5.1 per cent.

Economist at Forecast Pte Ltd in Singapore Bernard Aw was cited as saying that while exports remained under pressure, the Thai economy should pick up in the second half "on the back of improvement in the US and Japanese economies, as well as signs of stabilisation in the Eurozone".