Exports tipped to rise
Finance Minister Apisak Tantivorawong recently stated he expected Thailand’s exports to start the long road back to recovery by jumping at least two percent in 2016, on the back of what he suggested was global economic recovery.
Worldwide, economists are optimistic that the global marketplace will grow between two and three percent, but could go even quicker if management of the recovery is good.
Internally, the Ministry of Commerce has set an export growth target of five percent, at US$18.8 billion a month for a total of US$225 billion for the year.
Exports make up 70 percent of Thailand’s Gross Domestic Product (GDP), and in 2015 they fell by a whopping 5.78 percent, the worst fall in six years.
Exports had risen by 26.8 percent in 2010, 15.2 percent in 2011 and 2.93 percent in 2012.
Those three very good years have since been pared back by falls of 0.3 percent in 2013 and 0.4 percent in 2014, before last years’ dramatic drop.
In contrast to the Finance Minister’s optimism, the Bank of Thailand has issued figures which it suggests will see exports recording largely flat growth in 2016, since demand from China is expected to slow down further. Considering the Bank of Thailand had forecast the severe export drop in 2015, it is quite possible its number crunchers are going to be better at predicting the final numbers for this year better than a politician.
Nonetheless, exports to neighbours Laos and Myanmar have jumped significantly, with per capita income in both states having jumped by 20 percent over the last five years.
Eight percent of Thailand’s export value came via Myanmar, Laos, Cambodia and Malaysia, and these numbers are expected to grow further.
In the meantime, the Fiscal Policy Office (FPO) said GDP for 2015 finished at 2.9 percent, which was 0.1 percent higher than it had predicted. The slightly better figures were due to the government’s stimulus packages and the good tourism numbers.
The government launched a range of stimulus measures last year, some of which included boosting the finances of rural residents, giving small and medium enterprises better access to funding and assisting property developers to sell inventory. It also reduced taxes on shopping over the new year period.
The Finance Minister said the government would disburse 500,000 baht to each of the 79,556 Village Funds over the next six months. He claimed this would help boost economic growth by around 0.15 percent for the year.
The money would be earmarked by the Village Funds for agriculture processing and value-added farm products. It would also be used to improve and develop water resources in villages.