Thailand's exports fell for a 10th straight month in October and were worse than expected, while imports slumped again, showing the trade-dependent economy is still struggling to get back on track after more than a year under military rule. Although a coup in May 2014 ended months of political unrest, Southeast Asia's second-largest economy has yet to get back on a firm growth track, with pivotal exports and domestic consumption persistently sluggish.
Exports in October fell 8.11 percent from a year earlier, the Commerce Ministry said on Tuesday, worse than the 6.95 percent drop predicted by economists in a Reuters poll and a 5.51 percent decline in September. "The global economy has not recovered yet, commodity prices are falling and exchange rates are volatile," Commerce Minister Apiradi Tantraporn told a news conference.
In January-October, exports slipped 5.3 percent from a year earlier and are expected to contract this year for the third year running. Exports account for about two-thirds of the economy. In October, exports to China fell 3.6 percent while those to Japan dropped 13.9 percent. Shipments to Europe dropped 12.3 percent and those to the United States dipped 1.4 percent.
Imports slumped 18.2 percent in October year-on-year after September's 26.2 percent tumble, and compared with the poll's projected 16.03 percent decline. October imports of capital goods rose 2.5 percent but raw materials tumbled 21.3 percent and consumer goods slipped 9.1 percent, pointing to continued weakness in domestic demand.
The decline also signals more pain ahead for many exporters as most imported materials are assembled into completed goods and shipped out again. However, imports of auto parts increased 28.7 percent from a year earlier. Thailand is a major regional hub for global auto companies, and exports of cars and parts rose 0.2 percent. An 8 percent slide in the baht currency so far this year has done little to reverse the deterioration in exports. The state planning agency expects Thai exports will contract 5 percent this year, the biggest fall since 2009, before rising 3 percent in 2016.
As exports remain weak, the military government is focusing on driving investment in a bid to lift the economy, which grew just 0.9 percent last year, the weakest since flood-hit 2011. The planning agency expects economic growth of 2.9 percent this year and 3.0-4.0 percent next year. After two surprise interest rate cuts in March and April, the Bank of Thailand has left its policy rate steady at 1.50 percent, near the record low of 1.25 percent. It next reviews policy on December 16, and most economists expect no change for now.
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