Thai exports beat forecast in May, weak baht a boost

Image from The Nation Thailand/ANN.

BANGKOK, July 1 (Reuters): Thailand's exports in May rose a faster than expected 10.5% from a year earlier, helped by increased global food demand and production, and a weak baht, with the trend set to continue this year, the commerce minister has announced.

Exports, a key driver of Thai growth, beat a forecast rise of 6.7% in May in a Reuters poll and compared with a 9.9% increase in the previous month.

Excluding gold, oil-related products and weaponry, shipments increased 11.1% year-on-year, Commerce Minister Jurin Laksanawisit told a news conference.

Exports should continue to grow and beat the ministry's target of 4-5% growth this year, he said, adding shipments had already increased 12.9% year-on-year in the January-May period.

"The global manufacturing sector continues to expand so there is demand for raw material from Thailand," he said.

"A weakening baht is also helping export competitiveness," he added. The Thai currency has been trading at its weakest level in more than five years against the dollar.

However, baht weakness will also push up the cost of imported materials for production, Jurin said.

In May, the export gains were helped by agricultural and agro-industrial products, with rice shipments up 24.7% from a year ago, while industrial goods increased 4.2%, the ministry said in a statement.

The ministry sees rice exports of 7.5 million tonnes to 8 million tonnes this year.

Exports to key markets were higher in May, with those to the United States up 29.2% from a year earlier and those to China up 3.8%, and shipments to Southeast Asia up 10.4%.

In May, imports jumped 24.2% from a year ago, with a trade deficit of $1.87 billion in the month. - Reuters