This year's export outlook suddenly looks rosy after shipments increased by 7.33% year-on-year last month to surpass US$20 billion.
Shipping containers sit at Laem Chabang port in Chon Buri province, the main export port of the country. Thailand’s exports rose in June, and the Commerce Ministry’s growth projection for the year remains at 3.5%. PATTANAPONG HIRUNARD
The Commerce Ministry is due to release exact June trade data on Monday, but permanent secretary Chutima Bunyapraphasara yesterday revealed the June figure, which shows the first year-on-year increase since February, to $20.5 billion from $19.1 billion in June 2013.
In June, the first full month under the military government, shipments increased due to a recovery in major markets, especially the US and Europe, plus the ministry's measures to boost trade.
"This is a good sign for Thai exports, which are moving in a better direction," said Ms Chutima, who was recently named by the junta as the new commerce permanent secretary to replace Srirat Rastapana.
Thai exports had been weak this year even though months of political unrest did not disrupt factories or ports, while the global economy improved a bit.
Shipments contracted by 1.98% year-on-year in January before increasing 2.43% in February. They slumped again in March, by 3.12% year-on-year, then 0.87% in April and 2.14% in May.
As a result, exports for the first five month fell by 1.2% from a year earlier to $92.9 billion. Imports for the period amounted to $94.4 billion, leading Thailand to register a trade deficit of $1.55 billion over the first five months.
Ms Chutima attributed the drop mainly to lower shipments in the agricultural and industrial segments.
"Despite the contraction in the first five months, the ministry is sticking to its export growth forecast of 3.5% for all of 2014," said Ms Chutima.
"In the second half there are still drivers, particularly the global economic recovery and increasing exports in the industrial segments."
Exports last year declined by 0.3% from 2012.
Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, agreed, saying shipments were expected to see clearer signs of recovery in the second half.
The current baht gains are also unlikely to affect this year's export performance, he said.
"The baht appreciation merely reflects higher confidence on the part of foreign investors," Mr Isara said.
The baht gained for a fifth week, its longest winning streak in more than a year, to 31.70/31.80 to the US dollar yesterday, as foreign investors pumped $2 billion into the local bond market over the last four days.
Global investors have been net buyers of Thai debt on each of the last 20 days, boosting their holdings by $5.3 billion in that time, according to figures from the Thai Bond Market Association.
They also pumped $700 million into local equities during that period.
Mr Isara said Thailand's economy was expected to see continuous improvement, with recovering confidence from both local consumers and foreign investors.
More new investments are also anticipated soon due to the accelerated disbursement of the fiscal-2014 budget and planning for 2015, while the Board of Investment (BoI) has been working faster in its best effort to push forward new pending applications.
Investment applications sent to the BoI reached a six-month high in June, a sign of rebounding confidence in Thailand even though the first-half figure was down sharply year-on-year.
The investment promotion agency reported recently 132 projects had applied for investment privileges, up from 119 in May.
However, investment applications dropped by 34.4% in the first six months to 534, with the value falling by 43.7% to 600 billion baht.
The BoI believes this year's target of 700 billion baht is still possible.
Foreign direct investment fell by 34.2% to 407 projects in the first half from 619 in the same period last year, with their value plunging 14.3% to 239 billion baht from 279 billion.