THAILAND: Exports Rise for 10th Consecutive Month, Weathering Baht Strength

Thailand’s exports rose for the 10th consecutive month in August as the baht’s appreciation to a 13-year high failed to curb demand for the country’s automobile parts and electronics.

Shipments increased 23.9 percent last month from a year earlier to $16.5 billion, Commerce Minister Porntiva Nakasai said in Nonthaburi province on the outskirts of Bangkok today. The median estimate of 12 economists in a Bloomberg News survey was for a 23.5 percent gain.

Surging exports helped Thailand’s economy overcome political turmoil to expand 9.1 percent last quarter, more than economists forecast. Prime Minister Abhisit Vejjajiva’s government is considering measures to temper the baht’s gains, which the Thai Chamber of Commerce said may affect overseas shipments in the fourth quarter.

“The baht’s gain may not reduce export orders yet, but it will definitely curb exporters’ income,”Pornthep Jubandhu, an economist at Siam Commercial Bank Pcl in Bangkok, said before the report. “We won’t see strong growth like in the first half” as global demand may weaken further, he said.

Baht Measures

The baht has gained 8.4 percent against the dollar this year, making it the second-best performer in Asia. The Bank of Thailand has proposed measures including an increase in limits on investing and lending overseas by companies and individuals to boost fund outflows, which will help slow the baht’s appreciation, Finance Minister Korn Chatikavanij said Sept. 17.

Those measures will be implemented this week, Assistant Governor Suchada Kirakul said today in Bangkok.

Siam Cement Pcl, the nation’s third-biggest company by market value, said Sept. 13 its net income in the third quarter may be hurt by the baht’s strength.

“Japan and China intervened in their currencies, so we will probably benefit from that,” Porntiva said. “If the central bank and the government are taking care of this issue, we expect that the baht can be held at the 30 level and exports won’t be affected much.”

The commerce ministry still expects exports to grow 20 percent to $183 billion this year, even after the baht’s appreciation, Porntiva said.

Imports climbed 41.1 percent in August, the ninth consecutive month of gains, as the nation’s economic recovery raised demand for raw materials and consumer goods. Thailand had a trade surplus of $643 million last month, compared with a $940 million deficit reported in July.

Exports of auto parts increased 68 percent and electronics gained 42 percent, according to the data. Rice shipments declined 19 percent because of price competition with Vietnam, Pakistan and India and the stronger baht, Porntiva said.

Thailand’s exports to the U.S. grew 37 percent in August, up from a 24 percent gain a month earlier, and shipments to Europe rose 20 percent from 16 percent. Exports to China rose 22 percent compared with a 30 percent gain in the previous month, according to the ministry’s statement.