Export trouble raises fears for Thai economy

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BANGKOK, Aug 27 (AFP): Exports, a pillar of strength in Thailand's wobbly economy, have suddenly slowed due to cooling foreign demand and a strong currency, raising fears the kingdom will miss already modest growth targets.
Thailand counts on exports for 60 per cent of its economy. It is the world's biggest exporter of rice and also a major producer of cars, textiles, electrical appliances, fruit and shrimp.
But exports in July grew a modest 5.9 per cent year-on-year to 11.8 billion dollars, the lowest level in 29 months, amid a slump in demand in the United States and Japan, the kingdom's top trading partners.
"Exports grew slower than our target of above eight per cent in July because of the strong baht and a decline in demand abroad," said Tanyalak Surapol, a senior economist at the private Kasikorn Research Centre.
US-bound shipments in July dropped by 13.6 per cent from a year earlier, while exports to Japan edged up just 1.7 per cent in the month, the commerce ministry said.
The weak July data came as a particular shock as exports had been rising over 18 per cent each month since January this year.
Exports have been among the few bright spots of the Thai economy, which has been hit by sagging business confidence and anaemic consumer spending due to prolonged turmoil over last year's coup ousting premier Thaksin Shinawatra.
The military-installed government has expected the economy to grow just over four per cent this year, among the lowest in Southeast Asia, while cutting the export growth forecast for the full year to 12.5 per cent from 13.0 per cent.
"Exports will be a far less potent engine of growth for the Thai economy during the second half," Phatra Securities said in a research paper following the release of the July export data.