The Thai economy is going from bad to worse after June exports saw the biggest fall in three years and six months.
The Commerce Ministry yesterday reported exports tumbled for a sixth straight month in June, down by 7.87% year-on-year to US$18.2 billion, leading the first-half performance to fall by 4.84% to $107 billion.
It was the biggest drop in exports since an 8.15% fall in December 2011.
Somkiat Triratpan, director of the ministry's Office of Trade Policy and Strategy, attributed the fall largely to the slower-than-expected global economic recovery and low crude oil prices.
Last month, exports to the US slipped 0.1% year-on-year, but bigger falls came in shipments to China (0.8%), Japan (4.2%) and Europe (7.1%).
Shipments of major industrial goods fell by 7.7% due mainly to lower exports of automobiles and auto parts, finished oil, chemicals, plastic pellets and gold, while agro-industrial goods dropped by 4.1%, mainly for rice, fresh and frozen seafood and sugar.
Imports slipped 0.21% from a year earlier to $18 billion, with the figures for six months down by 7.91% to $103 billion.
Mr Somkiat said even though it was not clear whether export performance would recover this year, he saw signs of higher shipments, particularly in the automotive and agricultural sectors.
A weaker baht will be a positive factor helping exports in the second half, when purchase orders are seasonally active.
The ministry is maintaining its forecast that exports can expand by 1.2% this year, but the Bank of Thailand predicts a 1.5% fall after shipments fell by 0.32% in 2013 and 0.41% last year.
Nopporn Thepsithar, chairman of the Thai National Shippers' Council, said his agency was set to revise down its export forecast again after last month's prediction of a contraction of 2%.
Santitarn Sathirathai, an economist at Credit Suisse, said June exports were disappointing due largely to shipments of rice and cars.
Credit Suisse continues to see downside risks to economic growth and believes weak growth would force the central bank to do more to weaken the currency and support exports, he said.
"We expect another 25-basis-point cut in the policy rate, while our foreign exchange team sees the baht reaching 35.50 to the US dollar in 12 months," Mr Santitarn added.