BANGKOK, Nov 26: Thai exports in October rose less than expected from a year earlier, when the country was hit by floods, but most economists still expect policy rates to be kept on hold at a meeting on Wednesday.
In October, exports rose 15.57 percent from a year earlier. In a Reuters poll, economists had forecast a 20 percent gain because October 2011 was when Thailand began to suffer devastating floods that battered exports and the whole economy.
In September, when the year-on-year figure didn’t reflect a low, flood-hit base, exports increased only 0.2 percent.
In the first 10 months of 2012, exports have been only 0.34 percent above the year-earlier level.
Imports in October were 21.61 percent higher than a year earlier, stronger than the 11.8 percent economists projected.
The trade data came two days before the last meeting of 2012 of the Bank of Thailand committee that sets policy rates. Most economists expect no change on Wednesday by the committee, which on Oct. 17 unexpectedly cut the rate by 25 basis points to 2.75 percent to lift domestic demand.
‘I don’t think the (central bank) will cut the policy interest rate,’ said Santitarn Sathirathai, an economist at Credit Suisse in Singapore. ‘Previous cuts were primarily driven by concerns about growth. Q3 GDP was very strong, stronger than anyone expected really, and also now this trade number suggests domestic demand remains quite strong, which is a key thing they’re looking at now.’
In the third quarter, Thai GDP increased by a stronger-than-expected 1.2 percent from the April-June period as domestic demand offset a slump in exports and output.
With the year-on-year comparisons skewered by the 2011 floods, it is difficult for the central bank to get a real picture of how much momentum the economy will carry into 2013.
Exports slumped and the economy contracted sharply in the final months of 2011 as the floods swamped big industrial zones. Thailand is a regional hub and export base for top global car makers and the world’s number two producer of hard disk drives.
‘Exports were helped by a pick-up in the flood-hit industries as well as a recovery in the U.S. Economy and more shipments to new emerging markets,’ Srirat Rastapana, the Commerce Ministry’s director general of Department of International Trade Promotion, told a briefing
Exports in November and December on a yearly basis will also be strong because of the base effects. The final quarter is usually the strongest period for the country’s shipments.
On a monthly basis, exports rose 5.8 percent from September.
Although most flood-hit firms are now back to normal, global demand will continue to hit exports and output. Industrial goods account for about 65 percent of total exports, which are equal to over 60 percent of the economy each year.
The Commerce Ministry’s customs-cleared trade data showed shipments to the European Union rose 9.6 percent in October from a year earlier after a 12.9 percent fall in September.
But exports to China fell 7.7 percent in October year-on-year while those to the United States increased 17 percent and to Japan rose 10.2 percent.
Shipments to countries in the Association of Southeast Asian Nations (ASEAN), whose economies have been growing, rose 14 percent after an 11.7 percent drop in September.
The ministry forecast export growth of 4.5-5.0 percent for all 2012. Last year, shipments rose 15 percent from 2010.
Last month, the Bank of Thailand (BOT) cut its export growth forecast for 2012 to 4.4 percent from 7 percent and that for 2013 to 9.0 percent from 10.8 percent. (agencies)
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