Thailand: Trade surplus shrinks amid slower exports
September 30, 2011
In August, exports expanded 28.4% over the same month last year, which represented a slowdown compared to the 36.4% increase registered in July. The reading fell short of market expectations, which had exports growing 30.6%. The monthly deceleration reflected slower growth in overseas sales of manufacturing products, particularly in high-tech shipments. On the other hand, imports accelerated from a 13.2% increase in July to a 45.9% expansion in August, which marked the fastest pace since May 2010. As a result, the trade surplus shrunk from USD 4.5 billion in July to USD 705 million in August. The Central Bank recently stated that import data from August will exclude insurance and freight costs, which will make import values fall by 10% compared to the customs-based series calculated by the Ministry of Commerce. Moreover, the recent flooding that has swept across the central region of the country is affecting the export supply chain, further deteriorating exporters' prospects for the coming months. The Central Bank expects exports to expand 22.4% this year, before slowing to 12.4% in 2012.
Author: Ricardo Aceves, Senior Economist