2010.08.1910:25:00UTC+00Thai Trade Balance Swings To Deficit In July

Thailand's trade balance swung to a deficit in July, as import growth outpaced exports, official data revealed on Thursday.

The trade balance was a deficit of $940 million in July, reversing a surplus of $2.32 billion in June, Commerce Minister Porntiva Nakasai said. That was in contrast to a $1.58 billion surplus economists had expected.

Exports were up 20.6% year-on-year to US$15.56 billion, slower than 46.3% in the previous month. Overseas sales rose for a ninth consecutive month. Meanwhile, imports rose 36.1% to $16.5 billion. In June, imports grew 37.9%. That was the eighth consecutive increase.

The Thai baht has strengthened recently raising exporters' concerns. But, Bank of Thailand Governor Tarisa Watanagase said yesterday that she did not fear the strong currency to hurt exports as baht moved in line with other currencies of the region. Meanwhile, the commerce minister urged the central bank to take necessary actions to stabilize the currency.

The central bank raised its key interest rate in July for the first time in almost two years. Bank of Thailand made a quarter point hike to 1.50% in the policy rate. The next monetary policy meeting is due on August 25.

The bank expects the economy to grow between 6.5% and 7.5% this year on the back of sound domestic economic fundamentals, bright prospects of a continued global recovery and improvements in consumer and investor sentiments.

The Commerce Ministry forecasts exports to grow 20% this year to $183 billion, while the Bank of Thailand expects 24.5%-27.5% growth.

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