Exports hit five-year high, industry confidence rising
Goods and services made in Thailand were literally flying out of factories as exports hit a five-year high in January, and confidence among industrialists rose to its highest level in three years, while some analysts and agencies began raising their forecasts for the Thai economy.
Exports, the strongest driver of the Thai economy, surged 17.6 percent year on year in January, reeling in over $20.1 billion, according to statistics released last week by the Ministry of Commerce. The performance was powerful evidence of the Thai economy’s resilience, and represented a major turnaround from just three years ago when exports failed to grow at all. Thailand offers a diverse menu of exports ranging from raw agricultural commodities such as rice and sugar to advanced technology products including electric vehicles.
Thai exports to the United States rose by 11.3 percent. Overall, though, Thailand ran a trade deficit in January as it imported $20.22 billion worth of goods for a shortfall of $119.2 million.
Minister of Commerce Sontirat Sontijirawong said that demand from all of Thailand’s major trading partners was robust, and served as a counter to the rising value of Thailand’s currency, the baht. The stronger baht has led to trepidation among some manufacturers who fear that higher-priced Thai goods may not fare well against competition. The Ministry believes that export growth should reach 8 percent for 2018, higher than the 6.8 percent forecast by the National Economic and Social Development Board (NESDB).
Soaring exports, rising consumption and major infrastructure investments by the government helped propel the Thai Industries Sentiment Index (TISI) to its highest level in three years. The TISI is compiled by the Federation of Thai Industries, which surveyed 1,045 business members in 45 industry sectors.
With the National Economic and Social Development Board reporting last week that fourth quarter growth reached 4 percent, many analysts have raised their forecasts for the economy this year, while the government said it was funneling unused money from the budget to projects that will boost ease of doing business and national competitiveness.
“The business sector has positive outlook about Thailand’s economy in this year,” said Chen Namchaisiri, chairman of the Federation.
And it’s not just the Federation and its members that have a positive outlook. The NESDB raised its growth forecast to a range of 3.6 percent to 4.6 percent. That projection is based, however, on its export growth forecast of 6.8 percent, which is more modest than the Commerce Ministry’s prediction.
NESDB Secretary-General Porametee Vimolsiri said the agency’s forecast for growth was based strongly on the export figure, along with increases in revenue from tourism.