Thai exports and output flag amid global gloom
Thai exports and output flag amid global gloom
Kittiphong Thaicharoen Reuters Bangkok
Thailand's flagging economy suffered fresh pain in September with exports and manufacturing output faltering due to a global slowdown and the hijack attacks in the United States, central bank data showed on Wednesday.
The Bank of Thailand said in a statement the weak economic data was "aggravated by terrorism and sabotage in the U.S. which directly affected the economy and public sentiment".
Thailand's manufacturing production index fell 1.8 percent year-on-year, only its second fall this year. The drop in production was in line with expectations and partly due to the fact the index was unusually high last September, analysts said.
Monthly trade slumped, with exports down 11.5 percent year-on- year and imports sinking 6.8 percent. Many analysts had expected the drop in exports to be even sharper, however, and markets showed little reaction to the data.
Analysts said there was more pain to come for the economy.
"Given the September 11 attacks on the United States, we all knew that it's going to affect our exports and most economists or analysts also expect monthly numbers for at least the next three to four months will be on a downward trend," said Marc Lavoie, head of research at Asset Plus Securities.
Analysts said the drop in imports was a worrying sign as it signaled a drop in output in coming months.
"I'm worried about the import figure because this signals producers may be reducing their orders, and production will decline," said Isara Ordeedolchest, economist at TISCO Securities.
"For the rest of the year we should see a weakening in international trade and bad signals for production."
Thailand's recovery has lost momentum this year as the global economic environment worsens, battering exports which have been the country's main engine of growth.
The authorities have repeatedly cut their growth forecasts for this year and next. In the latest revision, the central bank on Monday cut its 2001 forecast to 1.3-1.8 percent from 1.5-2.0 percent and its 2002 forecast to 1-3 percent from 4-6 percent.
A Reuters poll in early October showed analysts expected 2001 Thai GDP growth of 1.35 percent, rising to 2.37 percent in 2002. The economy grew 4.4 percent in 2000.
The September current account was $367 in surplus, which analysts said was encouraging.
"That's the little bit of good news in the bad news -- even though things are slowing, at least they can maintain a current account surplus," Lavoie said.
But the balance of payments dropped to a $236 million deficit in September from a $350 million surplus in August.