Thailand: BoT pours cold water on export view

  • The Bank of Thailand has grown more pessimistic about the prospects of achieving its export growth forecast of 9% in 2018 as the intensifying trade dispute between the world’s top economies dampens global demand.
  • “The [central bank] estimates export growth for 2018 at 9%, while it grew 8.1% for 9M18,” Ms Pornpen said. “To achieve the forecast, exports need to grow 11.4%, which is considered a challenging figure, for 4Q18.”
  • Payment-based exports dipped 5.5% year-on-year in September on a mix of negative factors, including the US-China retaliatory tariffs and a high comparative base.
  • The overall contraction was also attributed to accelerated exports of cars to Australia in earlier periods and the temporary disruption of goods transport to trading partners, particularly Japan, the Philippines and Hong Kong, due to natural disasters.
  • Moreover, the high-base effect stemming from 2017’s surge in exports of mobile phones from the launch of new models, plus accelerated shipment of solar cells and washing machines before the US safeguard measures were put in place, weakened exports.
  • In Sep 18, Thailand’s overall shipments to China contracted 14.1% y/y.
  • Another key engine driving the Thai economy, tourism, also tapered off in Sep 18, with foreign arrivals registering moderate growth of 2.1% y/y.
  • Foreign tourist growth declined to 1.9% in 3Q18 from 8.4% and 15.5% in 2Q18 and 1Q18, respectively, due to a decline in Chinese arrivals.
  • Positive momentum in September was supported by domestic demand from both private consumption and investment, as well as public spending.

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