BANGKOK: Thailand's customs-cleared exports unexpectedly dropped in October after two months of gains, adding to pressure on the struggling, trade-reliant economy in the face of tepid global demand.
Exports, worth about two-thirds of the Thai economy, have contracted the past three years, placing a big drag on the military government's attempts to revive South-East Asia's second-largest economy.
Domestic consumption also remains sluggish, despite the junta's efforts to boost demand since it seized power in May 2014 to end months of political turmoil.
Exports fell 4.2% from a year earlier, commerce ministry data showed on Monday, compared with the median forecast for a rise of 2.15% in a Reuters poll and a 3.4% increase in September.
"This suggests a fragile recovery in exports and it's difficult to see positive exports this year," said Sarun Sunansathaporn, an economist at Bank of Ayudhaya.
"But exports should improve next year as commodity prices stabilise and export quantity increases," he said. "Higher imports will also benefit future exports."
Imports in October rose a better-than-expected 6.5% from a year earlier. Economists had expected a rise of 3.6% after an increase of 5.6% in September.
Imports of raw materials rose 17.46% in October on-year, led by electronics parts, chemical products, while consumer goods rose about 2.6%.
Many of Thailand's imports are assembled into finished goods and shipped out again.
Last week, the state planning agency predicted exports would be flat this year, rather than fall 1.9% as previously projected. It expected the economy go grow 3.2% this year, up from 2.8% last year.
The export decline in October was due to slow global trade, weaker shipments of gold and oil products, and the fall was magnified by comparison with last year's high base, senior ministry official Pimchanok Vonkhorporn told a briefing.
In January-October, exports dropped 1.0% on-year but the ministry hopes for a small rise in shipments this year.
"We are still confident that exports will show good growth in the last two months, as many factors are on the upside, such as farm product prices and oil prices," Pimchanok said.
Last month, Thai exports to the United States, Thailand's biggest market, dropped 4.7% from a year earlier, while those to Europe slumped 9.2%. But shipments to Japan rose 8.9% on-year and ones to China increased 4.4%. - Reuters
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
