Thai economy slowing sharply as exports sink

Thai economy slowing sharply as exports sink

BANGKOK (Reuters): Thailand's economy is hurting badly, with
manufacturing output and exports sinking as many of its major
markets near recession, key data showed on Friday.

Figures from the Thai central bank confirmed analysts' fears
that industrial production dropped in July from June, its second
successive month-on-month decline on a seasonally adjusted basis.

Thai exports fell 14.2 percent year-on-year in July, while
imports contracted 3.8 percent against the year-ago period, the
Bank of Thailand said.

BOT chief economist Atchana Waiquamdee blamed the figures on
the slowdown in Thailand's main markets, which have seen
significant contractions in demand, especially for high-
technology goods.

"The concern is on the sharply falling exports which are
attributable to slowing world economies including those of major
trading partners," Atchana told a news conference.

"This is especially so when compared with booming exports in
July last year."

Atchana said the bank believed Thai exports would probably
contract by 4-5 percent overall this year.

The BOT data was bad on almost all fronts.

Although the widely watched Manufacturing Production Index
(MPI) rose 1.9 percent year-on-year in July to 112.0, this was
down from a revised 112.1 in June and 113.9 in May, the BOT
figures showed.

Thai exports fell a sharp 14.2 percent, year-on-year, to
US$5.143 billion in July from $5.388 billion in June and $5.996
billion in July 2000.

Thai imports were worth $5.146 billion in July, up from $4.985
billion in June but down 3.8 percent year-on-year from $5.351
billion a year ago.

The plunge in exports sent Thailand's trade balance just into
deficit. The country posted a $3-million trade deficit in July
compared with a $403-million surplus in June and a $645 million
surplus last July.

The figures were generally in line with market expectations
and showed Thailand's key industries are suffering from the
worldwide slowdown in demand for electronics and electrical
appliances.

Output of construction materials, another key plank of the
Thai economy, also declined, due in part to a temporary closure
of a large local cement factory, the BOT said.

Kenneth Ng, head of research for ING Barings Securities in
Bangkok, said Thailand's financial markets had been expecting
disappointing figures.

"I think that people were pretty much expecting a poorer third
quarter coming through," Ng said.

He said the trade figures were in line with data released
earlier in August by the Thai commerce ministry.

"I wouldn't think that these figures were particularly
unexpected in terms of a slowdown in exports in July."

The Thai stock market remained unruffled by the figures,
confirming that weak data was widely expected.

By 0912 GMT (4.12 p.m. Jakarta time), the benchmark Stock
Exchange of Thailand composite index was up 0.33 percent to
332.72 points.