Export growth ‘to hold’

BoT: Income effect, IoT prove beneficial

The export recovery is set to hold steady for the remainder of the second quarter, but its knock-on effects on other sectors remain unclear, says a Bank of Thailand senior official.

“The recovery in Thai merchandise exports is expected to continue throughout the second quarter, supported by three primary factors,” said Pornpen Sodsrichai, director of macroeconomic and monetary policy at the central bank.

These factors are the income effect in trade partner countries, the larger supply of goods produced in Thailand, especially agricultural products, and the rising trend of the Internet of Things (IoT).

On a balance-of-payments basis, Thai merchandise exports — representing 70% of the country’s GDP — reached US$16.5 billion (562 billion baht) in April, up 5.9% year-on-year. Excluding gold export value, exports reached $16.3 billion, up 5.5% from a year earlier.

Ms Pornpen said the trend of IoT had helped increase the export of electronics and appliances, which grew 3.9% year-onyear in April.

Export growth resulted from strong

demand abroad, supported by a recovery in crude oil prices.

But overall manufacturing production contracted in April, as reflected by a 1.7% drop in the manufacturing production index, due to stocks of goods that still need to be cleared out, Ms Pornpen said.

“The ability to pass on the recovery from exports t o other sectors such as manufacturing production and consumption should happen soon, although the Bank of Thailand will need to

monitor the situation,” she said. “The stock of goods for export continued to decrease and we expect manufacturing production to speed up soon, although we’re not exactly sure how long it will take.”

She said private consumption indicators have continued to expand, mainly from spending in the service sector and increased tourism numbers.

The private consumption indicators rose by 3.6% year-on-year in April, supported by growth in consumption of services and

durable goods.

But the non-durable index was down 0.9% year-on-year in April, while the semidurable index fell 2%.

Tourist arrivals were recorded at 2.8 million in April, up 7% from the same period last year, according to the central bank’s data.

In April, the value of merchandise imports grew by 10% year-on-year, or 8.8% excluding gold, driven by imports of raw and intermediate materials.