BANGKOK—Thailand’s trade balance returned to a deficit after exports unexpectedly declined in July, the Commerce Ministry said Wednesday, underscoring the stubborn challenges the military government faces in reviving the economy.
The military rulers who took charge in May amid political turmoil have looked to trade as a key contributor to getting the economy back on track, but instead saw a trade deficit in July of $1.1 billion.
That contrasted with June’s $1.79 billion trade surplus, when exports enjoyed 3.9% on-year growth after four consecutive months of contraction.
Exports in July dropped 0.85% year-over-year to $18.89 billion. Imports recovered from an earlier plunge, but still shrunk 2.86% on-year to $19.99 billion, the Commerce Ministry reported.
The disappointing July results were partly blamed on falling exports of fuel products and gold, which represent 6% of Thailand’s total exports. They plunged 34.26% in July.
ince seizing power, the ruling military unlocked fiscal spending and approved billions of dollars in investment incentives and infrastructure projects, overall improving the country’s economic outlook.
The export industry is still hoped to be a major driver for Thailand’s economic recovery, alongside consumption. But its growth outlook for this year now looks less promising than before, said Duangkamol Jiambutr, deputy director-general of the Department of International Trade Promotion
“The annual export growth rate in 2014 may end at 1.9%,” she said, adding that the Commerce Ministry may soon cut its current export growth target of 3.5%. Thailand’s exports contracted 0.32% in 2013.
Overall, during the first seven months of this year, Thailand’s exports and imports have fallen 0.42% and 12.49% on-year, leaving a trade deficit of $865.5 million.
“We have noticed that the recovery of exports has been quite slow,” said Sarun Sunansathaporn, an economist at TISCO Economic Strategy Unit in Bangkok. “The early stage of recovery in China, who is Thailand’s major market, has apparently not benefited our trade just yet.”