Exports rise as government prepares stimulus
Thai exports rebounded in July, registering an unanticipated increase on shipments of gold, as the government unveiled a new stimulus program to ensure growth will reach 3 percent for the year. Meanwhile, Thai planners saw encouraging signs in the economy despite a global slowdown.
Export growth was up 4.3 percent compared to July last year, as global investors developed an appetite for gold on concerns that the U.S. and many other economies may be heading towards a recession. Gold is regarded as a “safe haven” when stocks and other assets decrease in value.
Thai exports to most major trading partners, including the U.S., increased in July, with fresh and frozen fruits and automobile shipments showing strength. Overall, deliveries of industrial products edged up slightly.
Export-dependent economies, such as Thailand and Singapore, have been weathering trade headwinds. Economies more dependent upon domestic consumption, such as the Philippines, have seen smoother sailing. Thai policymakers are aiming for higher growth in consumption to create more resilience, but exports remain the most potent driver of the economy.
To offset slower growth tied to weaker exports, the Thai government has created a new set of stimulus measures. The stimulus package, which will be implemented soon, is designed to keep the Kingdom’s overall growth at above 3 percent for this year.
“The economy is still expanding,” said Thosaporn Sirisamphand, Secretary-General of the National Economic and Social Development Council (NESDC). The “government stimulus package announced last week to help offset [any] damage.”
He said his agency is optimistic about household consumption, maintaining its previous forecast of 4.2 percent growth in consumption. That level of growth would indicate that consumers still have confidence in the economy. Public consumption is also forecast to stay at its previous estimate of 2.2 percent as the result of government support for lower-income people, which should boost household consumption.
Wichayayuth Boonch, Deputy Secretary-General of the NESDC, said that “judging by more applications for Board of Investment tax privileges in the second quarter, we expect a rise in new investment in Thailand in line with an 8 to 9 percent expansion of factory construction this year.”
He also noted that prices for commodities such as rice and sugar remained high, which is a big help for Thailand’s farmers and agricultural exports.
Photo courtesy of thainews.prd.go.th