Thailand's troubled economy continues to struggle, with exports falling for the ninth straight month in September as imports also plummeted.
The Commerce Ministry yesterday reported shipments fell by 5.51% year-on-year last month to a value of US$18.8 billion, easing slightly from August's sharp 6.69% fall, the second worst this year after a 7.87% decline in June, which itself was the biggest drop since an 8.15% decline in December 2011.
For the first nine months of this year, exports dropped by 4.98% to $162 billion.
September imports plunged 26.2% year-on-year to a value of $21.7 billion, resulting in a nine-month fall to $154 billion, down 10.5%.
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Agricultural and agribusiness products contracted by 9.9% year-on-year last month to $2.65 billion.
Industrial goods dropped by 1.9% to $15.1 billion despite shipments of automotive and parts rising by 20.6%, driven by a 144% surge in passenger car exports.
Somkiat: Soft demand among trade partners
Somkiat Triratpan, director of the Office of Trade Policy and Strategy, attributed the fall in exports to the weak global economy and soft demand in major trade partners, particularly Japan (down by 20.6%), France (down 18.1%), China (down 17.9%), South Korea (down 15.9%), Britain (down 10.1%) and the US (down 3.6%).
Overall crude oil prices also remained low, declining by 47.5% year-on-year in the first nine months, while global farm prices also dropped sharply, especially for rice, rubber and sugar.
Export prices of rice dropped by 9.5%, with rubber down 19.8% and sugar 8.2%.
Mr Somkiat insisted Thailand's export contraction was low compared with the performance of other countries such as Australia (-21.8%), France (-14.3%), Singapore (-14%), Japan (-9.2%), South Korea (-6.4%) and the US (-6.1%).
The Commerce Ministry is still maintaining forecast for exports to contract by 3% this year.
"Export contraction is likely to stay within a range of 3.5% to 4% if we come up with export values of $19 billion baht a month for the final three months of the year," Mr Somkiat said.
"The contraction will widen to 5% if we achieve only $18 billion a month."
Wallop Vitanakorn, vice-president of Thai National Shippers' Council, said last month's lower contraction in exports was due primarily to a surge in automotive shipments.
With the global economy remaining far from a recovery and Thailand's economy still weak, the country's exports are likely to fall by at least 5% this year, he said.
Santitarn Sathirathai, the Singapore-based head of economic research for Southeast Asia and India at Credit Suisse, said Thailand's growth would remain lacklustre albeit more resilient than expected, as tourism numbers may provide some upside risk to its 2015 GDP forecast of 2% growth.
Thailand's strong current account position means the baht will probably outperform its peers unless the Bank of Thailand takes more policy actions including cutting rates, he said.
"We continue to see room for another rate cut, but the timing remains uncertain. It seems to us the Bank of Thailand may wish to see how domestic demand will respond to various stimuli introduced by the government before adding another rate cut," Mr Santitarn said.
"We still think headwinds to exports will be sufficient to cap overall GDP growth in the fourth quarter, which would prompt the central bank to cut the rate by another 25 basis points by year-end.
"However, a December move looks more likely than the upcoming meeting on Nov 4."
Sarun Sunansathaporn, an economist in Bank of Ayudhya's research department, said September's export contraction of 5.5% was better than the projected 8.3%.
"Exports in baht terms were positive, as they improved to growth of 5.5% on the back of the baht's depreciation," he said.
However, Mr Sarun said last month's 26.2% import decline was a big surprise.
"This was even worse than economists' bearish forecast of a contraction of between 13% and 23.9%," he said.
Thailand's trade account surplus widened to $2.8 billion, marking a five-month streak of surpluses, Mr Sarun said, adding that prospects for domestic demand and exports remained tepid.