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Thai shippers cut export forecast, another worrying sign for economy
September 2, 2014 / 9:21 AM / 3 years ago

Thai shippers cut export forecast, another worrying sign for economy

* Thai shippers see exports rising less than 1 pct this year

* sees 2014 GDP growth of 1.5 pct despite weak exports

By Orathai Sriring

BANGKOK, Sept 2 (Reuters) - A Thai shippers’ group expects exports to grow no more than 1 percent this year, another worrying sign for a trade-dependent economy struggling after months of political unrest that led to a military coup in May.

Exports are crucial to Thailand, equivalent to more than 60 percent of its economy each year, and the Commerce Ministry is banking on export growth of 3.5 percent this year.

But that may be ambitious, as shipments in the first seven months slipped 0.42 percent from a year earlier, while imports fell for the 13th straight month in July; many imported materials are assembled into goods that are shipped out again, so the drop implies weak demand from exporting sectors.

“It will be difficult to get 1 percent (export growth) this year after an unexpected drop in July exports,” Nopporn Thepsitthar, chairman of the National Shippers’ Council, told Reuters.

The council’s latest forecast was for 1.0-1.6 percent. It has cut its projection steadily from 5 percent made late last year.

Exports fell 0.85 percent in July from a year earlier, according to Commerce Ministry data.

“We are very concerned about global markets as there are several risks such as international tensions, the Ebola outbreak and unstable financial markets,” Nopporn said. “We want to warn exporters and the public to get prepared for all the risks.”

Traders have also said Thailand faced delays in exporting millions of tonnes of rice because of a labour shortage at ports after hundreds of thousands of foreign workers fled amid fears of a military crackdown on illegal immigrants.

However, Nopporn said that was not an industry-wide problem.

The Bank of Thailand has forecast export growth of 3 percent for this year but is expected to trim that when it releases new economic forecasts on Sept. 26.

“Although export growth will not meet our forecast, it will probably not affect our GDP growth projection as we have other things helping, such as domestic demand and investment,” Assistant Governor Mathee Supapongse told reporters on Tuesday.

“We are keeping our 2014 economic growth forecast of 1.5 percent for now.”

The Finance Ministry has estimated export growth of 1.5 percent for this year and economic growth of 2 percent.

However, Gundy Cahyadi, an economist with DBS Bank in Singapore, said: “For growth to pick up above 2 percent, we need exports at around 6-7 percent, given the current situation.”

The economy grew 0.9 percent in the second quarter from the previous three months. The military government is expecting a rebound in the second half, helped by a return of confidence after the army’s intervention put an end to months of street protests.

Additional reporting by Kitiphong Thaichareon; Editing by Alan Raybould

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