FPO points to export gain despite US-China impasse

The Sino-US trade row has had at least some positive impact on Thai exports, with a 10-month gain of US$150 million (4.95 billion baht), says the Fiscal Policy Office (FPO).

The trade dispute between the world’s two biggest economies has induced both positive and negative effects, with some Thai shipments seen as substitutes for Chinese exports to the US and vice versa, said FPO fiscal policy adviser Pornchai Triraveja.

Thai exports affected by higher US import tariffs include steel products, aluminium, solar cells, and washing machines, subsequently causing a decline in shipments of these products, Mr Pornchai said.

But Thai exports that are considered substitute shipments and are part of the global supply chain have reaped benefits from the ongoing trade row, he said.

Rubber product exports to the US grew by 25.6% year-on-year in September, while those of plastic products and electronic components rose by 11.6% and 45.2% respectively, according to the FPO.

Thai exports to China as substitutes for US shipments also recorded higher expansion rates in September, Mr Pornchai said.

Animal feed exports grew by 296% year-on-year, while those of pork meat and other food products rose by 180% and 34%, respectively.

Total exports would have to expand by 7.8% on average during the last three months of 2018 to achieve the Commerce Ministry’s full-year export target of 8% in US dollar terms, Mr Pornchai said.

Exports rose by 8.7% year-on-year in October, boosted by higher shipments of fuel, gold, petrochemicals and agricultural products after September’s surprise decline of 5.2%, the first dip in 19 months.

Export value for the first 10 months jumped 8.2% year-on-year to $211.5 billion, exceeding the Commerce Ministry’s target of 8% growth.

Regarding a narrower contraction in tourist arrivals last month, Mr Pornchai said the 0.5% decline was deemed a stable figure and reflected growth from markets such as Malaysia, Hong Kong, Laos and Cambodia.

The FPO will provide an update to its economic forecast in December. The office’s current view is 4.5% GDP growth in 2018.

Separately, Dhanarak Asset Development Co Ltd, an entity under the Treasury Department, could ask the Finance Ministry to issue bonds, with the ministry acting as guarantor, to develop Zone C at the Chaeng Watthana Government Complex, a project worth 30 billion baht, said director-general Amnuay Preemonwong.