Thai exports fell sharply in November 2008 due to the closure of major international airports of the country and decline in demand due to global recession.
As per the Commerce Ministry, Thai exports declined steeply in November 2008, registering first monthly fall since 2003, as reported by Reuters.
In November 2008, exports plunged to S11.87 Billion, 18.6% down from November 2007. This decline followed a 5.2% rise recorded in October 2008. Previously, the exports dropped 6.2% in March 2002. In November 2008, shipments to the US, Europe and Japan decreased 19% whereas the exports to China came down by 36%.
Imports, on the other hand, jumped by 2% to $13.07 Billion on a YOY basis in November 2008 after posting a hike of 21.7% to $15.82 Billion in October 2008. So November showed a trade deficit of $1.2 Billion, following a $558 Million trade deficit in the previous month.
The primary reason that led to the plunge in Thai exports is the shutdown of leading international airports of the country. The closure of Suvarnabhumi airport (Bangkok) - that commenced on November 25, 2008 - for eight days caused a huge loss of $1.3 Billion in exports. Also, falling from an average $4 Billion per month, the value of exports via air came down to $2.7 Billion in November 2008. It is worth noting that about 25% of Thailand’s products rely on air transport for overseas shipments.
Moreover, the global economic turmoil has also played a major role in reducing the demand for Thai products. Due to the contraction of the leading markets of the country, demand for Thai rice, natural rubber and tapioca, which are the chief export products of the country, has declined. It, in fact, is shocking as their exports were predicted to rise 2.7% in November 2008.
Thai economy is likely to expand with its slowest speed in over a decade. Further, exports may freeze out or slump to about 5% in next year, due to weak demand from the largest markets of Southeast Asian countries such as the US, Japan and Europe.
According to a Research Analyst at RNCOS, “The decline in Thai export sector, which accounts for nearly 70% of the country’s GDP, will certainly put negative impact on the country. This, in turn, will weaken the Thai economy.”
