Thailand's export strength was greater intra-regional trade co-operation
Diversification paying off for Thai exporters
Companies respond to US slowdownBangkok Post article: Friday June 01, 2007
PARISTA YUTHAMANOP
|
Policymakers point to more diversified markets as a key strength of Thai exports. The Fiscal Policy Office has increased its export growth forecast for 2007 to 8% in real terms from 7%, citing better-than-expected demand.
The Bank of Thailand has forecast that economic growth in the US will slow to 2.4% this year, from 3.3% in 2006; with European economies slowing to 2.3% from 2.8%, Japan to 2.1% from 2.2% and Asia to 6.2% from 7.5%.
A central bank executive said the export market had shifted away from the three largest economic blocs. Twenty percent of Thailand's exports now go to Asean countries, 5% to the Middle East, 0.8% to South Africa 0.8% and 6% to other markets besides the Big Three.
''Exporters are able to find new markets, in light of the US economic slowdown. The share of exports to the Middle East rose by nearly 1% in the first four months of the year. And export shares to Asean countries such as Brunei, Malaysia and Singapore are on the increase,'' the executive said.
The World Bank said in a new book, An East Asian Renaissance: Ideas for Economic Growth, that a key contribution to Thailand's export strength was greater intra-regional trade co-operation. This is reflected by the fact that Asia's share of parts and components exports doubled from 11% in 1990 to 22% in 2003.
The central bank forecasts export growth to decline to between 9% and 12% in value this year from 17% in 2006, in line with the slowdown in the economies of some major trade partners.
The real effective exchange rate of the baht rose to 90.40 in April, from 88.90 in December, which has also weakened the country's export competitiveness. But the central bank insisted that trade partners' economic growth is more important for exports than the baht.
Titanun Malikamas, director of the central bank's Office of Macroeconomic Policy and Analysis, also said that the decision by China to expand the trading band of the yuan to plus or minus 0.5% a day from 0.3% earlier, could cool China's rapid economic growth.
''Stable economic growth in China will help Asian economies go smoothly as well. If the Chinese economy overheats, regional countries will be affected,'' he said. ''The yuan could either weaken or strengthen within the widened band. But expanding the band at least is an effort to increase flexibility in the yuan.''
