Thailand: Trade balance shows record deficit in March
May 1, 2012
In March, exports contracted 6.5% over the same month last year to USD 19.8 billion. The reading contrasted the 0.9% increase observed in February and marked the fourth decline in five months. The reading undershot market expectations that had exports declining 5.2%. The deterioration in March reflected a plunge in exports of agricultural products, particularly of rice, which have been declining since September 2011, due to the flooding. However, declines in exports of rice since January this year primarily reflected higher prices, as a result of the policies implemented by the government to boost farmers' income. Meanwhile, imports soared 25.6% in March to USD 24.5 billion, well above the 8.3% expansion registered in February. The reading reflected healthy growth in imports of durable goods, which suggests that the recovery in manufacturing remains on track. As a result, the trade balance swung from a USD 530 million surplus in February to a USD 4.6 billion deficit in March, which represents the largest shortfall on record. The government maintained its forecasts and expects exports to expand 15% this year.
Author: Ricardo Aceves, Senior Economist