Exports show solid growth for fourth straight month
Prospects for the Thai economy were looking even brighter last week when the Ministry of Commerce said exports, the key driver of growth, rose for the fourth straight month topping $20 billion in June for an increase of 11.7 percent over May, and a first half rise of 7.83 percent, well ahead of the ministry’s 5 percent target for the year.
The growth was even more impressive in the second quarter, coming in at 10.9 percent year on year for the fastest growth in the last 17 quarters, according to Pimchanok Vonkorpon, director-general of the Commerce Ministry’s Trade Policy and Strategy Office. Other analysts said double-digit increases would have ripple effects across the economy, helping to drive momentum for the rest of the year.
“Rising exports should mean rising productivity that will lend support to major enterprises,” said Narongchai Akaraseranee, chairman of the Board of Directors of MFC Asset Management and a former Minister of Commerce.
Along with strong exports, rising commodities prices and government infrastructure spending, especially in the Eastern Economic Corridor (EEC), would power more robust economic growth during the second half of 2017, he said.
Agricultural and agro-industry exports ticked upward for the eighth straight month, rising 18.3 per cent on year. Sugar exports soared by 36 percent, rice by 34.4 percent and rubber by 27.2 percent.
Manufactured goods also performed well, trending higher for the fourth straight month with an increase of 11.6 percent year on year. Plastic product exports shot up 49.2 percent year on year in June.
Narongchai’s assessment was seconded by Don Nakornthab, a senior director in the economic and policy department at the Bank of Thailand, who said economic recoveries in the United States and the European Union would translate into greater demand for Thai exports, and combined with infrastructure investment in the EEC would result in the economy gaining greater traction.
He warned, however, that government and businesses still need to monitor external risks, in particular the rise of Thailand’s currency, the baht, which could eat into export performance by forcing up prices on Thai goods, making them less competitive.
He also noted that the stronger baht has an upside, however, as it would reduce the cost of some raw materials that are imported for use by Thai manufacturers.
And imports have been rising. During the first half of this year, imports increased 15 percent year on year to $106.6 billion. Nonetheless, the country still recorded a trade surplus of $6.97 billion for the first six months of 2017.