Thai exports fall for seventh month, deepens economic gloom

Thailand's exports shrank for the seventh successive month in July, suggesting a key engine of the economy is unable to fire up although the government says there is "no crisis" yet. Southeast Asia's second-largest economy has struggled to recover since the army seized power in May 2014 to end political unrest. Exports and domestic demand remain weak while a deadly bomb blast in the capital Bangkok last week will likely deal a blow to the country's one bright spot, tourism.
Exports in July dropped 3.56 percent from a year earlier, the Commerce Ministry said on Thursday. A Reuters poll had forecast a 3.85 percent drop after exports fell 7.87 percent in June, the biggest annual fall since late 2011. "The data reflects the weak global economy and external demand," said Kobsidthi Silpachai, head of capital markets research at Kasikornbank in Bangkok. "The baht provides Thai exporters some pricing flexibility in dollar terms. It helps, but it is no panacea," he said. The baht has fallen about 7.7 percent against the dollar this year.
Ministry official Somkiat Triratpan told a news conference exports had improved following higher auto shipments in July, with the baht also helping. Despite more evidence of slowing demand in China, Somkiat said "if China's economy improves, it will benefit Thailand as we export parts and materials there." Deputy Prime Minister Somkid Jatusripitak told a seminar on Thursday that "there is no crisis yet but the economy has shown signs of weakness."
The ministry has predicted that exports would contract 3 percent this year, marking a third straight year of decline. Exports account for more than 60 percent of the economy. Annual July exports to China eased 1.6 percent while shipments to Japan slipped 9.6 percent. Exports to Europe fell 1.1 percent but rose 1.4 percent to the United States. Exports of key industrial goods fell 2.6 percent but cars and parts rose 6.8 percent.
Imports in July fell 12.73 percent from a year earlier, in line with a 12.0 percent slump forecast in the poll. In June, imports fell only 0.2 percent. The ministry said the import slump was due in part to a sharp fall in airplane imports and was not necessarily a sign of further weakness in exports. Many imported materials are assembled into completed goods and shipped out again.