Exports fell for the third month in a row in July but authorities remain positive that they will recover over the next two months thanks to higher purchase orders for Christmas and New Year celebrations.
The Commerce Ministry reported yesterday that exports declined by 1.48% in July from a year earlier to US$19.06 billion, while imports rose by 1.08% to $21.34 billion, leading the country to post a trade deficit of $2.28 billion.
In baht terms, shipments dropped by 3.41% to 584.27 billion baht.
For the first seven months, exports still managed to rise by 0.6% to $132.36 billion, while imports totalled $150.42 billion, up 3.85%.
The trade deficit for the period amounted to $18.05 billion.
In baht terms, exports saw a drop of 3.68% to 3.92 trillion baht.
The ministry attributed July's export fall mainly to weak global demand. It mentioned slowdowns in China and the United States and said the euro zone was still in recession last month.
It also cited political turmoil in the Middle East and Africa among other factors that hit exports.
Exports to China in July fell by 5.3% from a year earlier, compared with June's 16.7% decline.
As in June, the only markets showing growth were Southeast Asia and South Asia. Exports to neighbours rose by 8.6% in July as shipments to South Asia grew by 9.8%.
Permanent secretary for commerce Vatchari Vimooktayon said exports are expected to recover in the remaining five months boosted by the festive season.
She said the ministry would call a meeting with representatives of Thai trade centres worldwide to review its 2013 export growth forecast of 7-7.5% next month.
In July, the Bank of Thailand slashed its export growth projection to 4% from 7.5%. It also lowered its economic growth estimate to 4.2% from 5.1%.
Meanwhile, the National Economic and Social Development Board last week cut its forecast for full-year gross domestic product growth to a range of 3.8-4.3%, from 4.2-5.2% made in May.
The government's planning agency also lowered its export growth estimate to 5% from 7.6%, reflecting demand weakness abroad.
Amparwon Pichalai, deputy director-general of the International Trade Promotion Department, yesterday called on the Bank of Thailand to help improve the baht's stability, saying the currency's drastic swings would make it harder for exporters to sell their products.
"Drastic volatility of the currency is considered dangerous," she said. "This will make it more difficult for exporters to manage advance purchase orders and quote prices."
Benjarong Suwankiri, a first vice-president of TMB Analytics, said July's export performance was lower than TMB's forecast that shipments would move in a positive range.
He said exporters could rely on the CLMV (Cambodia, Laos, Myanmar and Vietnam) market for the rest of this year.
"We believe export growth this year will not exceed 3% and there is a high chance that the figures will stay in a range of 1-2% growth," Mr Benjarong said.
Areepong Bhoo-chaoom, finance permanent secretary, said the export growth target could be cut to 2-3% this year from 7% to be in line with the still-weak demand in the global market.
Export competition among Asian countries is intensifying as each country has a supply glut.
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Writer: Phusadee Arunmas & Wichit Chantanusornsiri