Thai exports in Q1 forecast to shrink 7%: KResearch

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BANGKOK, Jan 22 – Thai export revenue is likely to shrink in the first quarter of 2012, possibly by as much as seven percent, according to Kasikorn Research Center Co., Ltd. (KResearch).

The entire year’s exports are expected to grow between 2-8 percent, in contrast with the Commerce Ministry’s statement that Thai exports would move in a more positive direction this year.

KResearch reported balance of payments–based exports may contract by over seven percent year on year in the first quarter of this year, partly due to last year’s highly competitive base.

The forecast of seven percent contraction forecast for the first quarter of 2012, which is worse than the 4.7 percent drop in the fourth quarter of 2011, is mainly due to the country’s production sector still recovering from the flood crisis of last year.

However, accelerating imports of capital goods and raw material after the flood crisis are a good sign that Thai industrial production capacity may return to normal by the second quarter of 2012 as expected.

This is a positive for Thai exports, in particular industrial goods, accounting for 62.6 percent of Thailand’s exports.

Positive export growth is likely to be seen in the second half of 2012, but variables in the world economy, such as the European debt crisis and signs of China’s economy slowing, must be closely monitored.

Economic momentum of Thailand’s trade partners–such as China, Europe and Japan–tends to slow down in the face of risks of a protracted European debt crisis.

KResearch projects that 2012 export outlook may grow by about five percent in the estimated range of 2-8 percent, compared to 17.2 percent growth over 2011.