WASHINGTON: Exports fell for a 10th straight month in October — with totals worse than expected — even as imports continued their slide, showing the trade-dependent economy is still struggling to get back on track.
Southeast Asia’s second-largest economy has yet to get back on firm footing after last year’s coup, with pivotal exports and domestic consumption persistently sluggish.
Exports in October fell 8.11% from a year earlier, the Commerce Ministry said on Tuesday, worse than the 6.95% drop predicted by economists in a Reuters poll and a 5.51% decline in September.
“The global economy has not recovered yet, commodity prices are falling and exchange rates are volatile,” Commerce Minister Apiradi Tantraporn told a news conference. In January-October, exports slipped 5.3% from a year earlier and are expected to contract this year for the third year running. Exports account for about two-thirds of the economy.
In October, exports to China fell 3.6% while those to Japan dropped 13.9%. Shipments to Europe dropped 12.3% and those to the United States dipped 1.4%. Imports slumped 18.2% in October year-on-year after September’s 26.2% tumble, and compared with the poll’s projected 16.03% decline.
October imports of capital goods rose 2.5% but raw materials tumbled 21.3% and consumer goods slipped 9.1%, pointing to continued weakness in domestic demand. The decline also signals more pain ahead for many exporters as most imported materials are assembled into completed goods and shipped out again.
However, imports of auto parts increased 28.7% from a year earlier. The country remains a major regional hub for global auto companies, and exports of cars and parts rose 0.2%.
An 8% slide in the baht so far this year has done little to reverse the deterioration in exports. The state planning agency expects exports will contract 5% this year, the biggest fall since 2009, before rising 3% in 2016.
As exports remain weak, the government is focusing on driving investment in a bid to lift the economy, which grew just 0.9% last year, the weakest since flood-hit 2011. The planning agency expects economic growth of 2.9% this year and 3.0-4.0% next year.
After two surprise interest rate cuts in March and April, the Bank of Thailand has left its policy rate steady at 1.50%, near the record low of 1.25%. It next reviews policy on Dec 16, and most economists expect no change for now.