Thai exports fall more than expected, adding to economy worries

BANGKOK: Thai exports fell more than expected in November, showing that a pillar of the country remains weak at a time when political tension is stirring worries about its economic outlook.

The Commerce Ministry reported on Wednesday that exports dropped 4.1 percent in November from the same month in 2012, compared with a Reuters poll projection for a 1.7 percent fall and against October's 0.7 percent decline.

Exports account for about 60 percent of Southeast Asia's second-largest economy, and since May they have shown an annual increase in just one month, August.

There is no indication that street demonstrations in Bangkok are affecting exports.

But the tension over an unresolved political crisis has heightened worry about the economy's prospects for 2014, weighed on Thai financial markets and dragged consumer confidence to a nearly two-year low. In the first 11 months of 2013, exports slipped 0.5 percent from a year earlier while imports rose 1.2 percent.

Kampon Adireksombat, an economist at Tisco Securities, said that the trade data was discouraging but that "we could expect to see a mild recovery in exports next year thanks to improved export markets in the United States and Europe." The Commerce Ministry blamed the weak export data in part on a slow recovery in the world economy and a high base last year, and expressed confidence Thailand could achieve the ministry's forecast for export growth of 5 percent in 2014. "Compared with quite a depressing 2013, exports next year are likely to be very good because the global economy is expected to improve," Srirat Rastapana, permanent secretary of the Commerce Ministry, told reporters. Imports also fell more than expected in November, down 8.6 percent from a year earlier.

That compared with the forecast 3.0 percent drop in the Reuters poll and followed a 5.4 percent slide in October. Prime Minister Yingluck Shinawatra has called an election for Feb. 2, which the main opposition party says it will boycott. Protesters seeking to topple her have vowed to fight for an overhaul of the electoral system.

The crisis has hit Thai markets. This week, the baht has been at its lowest since March 2010. On Wednesday, it was trading around 32.72 to the dollar, down about 6.5 percent for the year.

Last month the Bank of Thailand's Monetary Policy Committee unexpectedly cut its policy rate by 25 basis points to 2.25 percent to support the economy and also trimmed its growth estimates.

The committee meets next on Jan. 22 and some economists think another rate cut is possible if the economy disappoints and the political woes continue.