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Published: Tuesday February 25, 2014 MYT 3:25:15 PM
Updated: Tuesday February 25, 2014 MYT 3:25:15 PM

Thai Jan exports and imports fall, unrest keeps hitting economy

An anti-government protester carries a placard as she travels down an escalator in a shopping mall located in an area occupied by protesters in central Bangkok January 13, 2014. REUTERS/Kerek Wongsa

An anti-government protester carries a placard as she travels down an escalator in a shopping mall located in an area occupied by protesters in central Bangkok January 13, 2014. REUTERS/Kerek Wongsa

BANGKOK (Reuters) - Thai exports fell in January and imports slumped, reflecting the deepening toll prolonged political unrest is taking on the economy and increasing pressure on the central bank to cut already-low interest rates.

The Commerce Ministry said on Tuesday that exports fell 1.98 percent in January from a year earlier, compared with a Reuters poll forecast for zero growth. In December, exports rose 1.87 percent.

January imports fell 15.5 percent from a year earlier, less than the 20.7 percent drop seen in the poll but the biggest fall since October 2009.

Imports of computers and parts were down 19 percent from a year earlier, auto parts off 31.8 percent and consumer goods 5.3 percent. Thailand is a regional hub for global carmakers and a major producers of hard disk drives.

The January trade deficit was $2.52 billion, compared with the poll's forecast for an $850 million gap.

Exports, which account for more than 60 percent of Thailand's economic output, were weak throughout 2013, falling 0.3 percent. Imports were also poor, up just 0.3 percent in 2013.

'NO ONE DARES PLACE BIG ORDERS'

Nopporn Thepsitthar, chairman of the National Shippers' Council, said that for consumer products "everybody is definitely delaying their imports as most shopping malls are quiet. Nobody dares to place big orders."

Last year's poor trade numbers crimped growth, which was only 2.9 percent compared with 6.5 percent in 2012 when Thailand rebounded from devastating floods.

Srirat Rastapana, permanent secretary of the Commerce Ministry, blamed "seasonal factors" for weak January exports, saying that month traditionally has the lowest shipments.

But she acknowledged the political tussle is hurting. "Political uncertainty will hurt confidence of importers of Thai goods, but this should be short-term. If the situation improves, exports will get better," Srirat said.

The ministry forecasts 2014 exports will rise 5 percent.

GUNFIRE EARLY TUESDAY

The data came out shortly after the latest episode of violence, which has increased worries of clashes between supporters and opponents of embattled Prime Minister Yingluck Shinawatra. Early Tuesday, there was gunfire and an explosion near one anti-government protest site, and medical sources said two men were wounded.

At least 20 people have been killed and more than 700 wounded since the protests began in November.

Protesters trying to oust Yingluck disrupted and boycotted the February 2 election. Thailand has in place a caretaker government with little spending power.

The central bank has forecast economic growth of about 3 percent or even lower for this year while some economists now predict just 2 percent.

In January, the central bank unexpectedly kept the policy interest rate unchanged at 2.25 percent, a three-year low. But the vote was 4-3.

But with economy weakening and the unrest, some economists see authorities cutting the rate at a March 12 meeting.

Exports to the United States rose 0.4 percent in January (versus +3.9 percent in December), those to Europe were up 4.6 percent (from +5.8 percent) and ones to Japan were up 1.8 percent (-2.8 percent). Shipments to China slipped 0.8 percent (from +16.1 percent).

The protests have not disrupted operations at Thai ports or factories. But the unrest has hurt confidence and domestic consumption, darkening the economic outlook. Violence in Bangkok has dented tourism, which accounts for about 10 percent of gross domestic product.

Tourist arrivals rose just 0.06 percent in January from a year earlier, when they jumped 16.4 percent, the Department of Tourism said. The state planning agency has cut its projection for 2014 foreign tourists by half a million to 27.5 million.

Top Thai convenience store operator CP All said on Monday the retail sector might grow only 5 percent this year, down from 9 percent last year. The firm's net profit in October-December dropped 26 percent from a year earlier.

(Additional reporting by Satawasin Sataporncharnchai and Pairat Temphairojana; Editing by Richard Borsuk)

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