Once one of Southeast Asia’s most vibrant and successful economies, Thailand has struggled with lacklustre growth fuelled by more than a decade of political instability and slowing demand for its exports.
The economy grew by just 2.8 per cent last year, one of the region’s slowest rates, in a blow to the kingdom’s junta government, which vowed to kickstart trading following its 2014 coup.
The country’s continued export slump, compounded by the slowdown in key trading partner China, is one of a number of ailments derailing that pledge.
Ministry of Commerce figures showed exports fell by 8.91 per cent year-on-year to $15.7 billion in January, the worst drop since November 2011 and the fourteenth consecutive month of decline.
Imports were also down 12.37 per cent to $15.5 billion.
Thailand’s exports have been declining for much of the last three years. Last year’s total export decline of 5.78 per cent was the worst drop in six years.
Former army chief turned prime minister General Prayut Chan-O-Cha has vowed to turn the economy round but his government’s policies, which include ramped up public spending, have so far borne little fruit.
Military control, which has been accompanied by a dramatic increase in rights abuses, also appears to have put off overseas interest, with applications for foreign direct investment slumping 78 per cent in the first 11 months of 2015.
Domestically, the economy is also beset by high household debt and low consumer confidence.
The ministry figures showed modest export growth in Thailand’s important auto-parts industry and a significant increase in rice sales for January.
However other key pillars of the export economy showed decline including rubber, plastics, computer parts and chemicals.
Tim Leelahaphan, a Bangkok-based economist with Maybank, said vegetable and fruit exports were one of the few farming sectors to show a bump, up nearly 20 per cent for January.
He added that Thailand’s military government appeared to be less concerned with exports.
“We note that exports that are a result of global issues are not the main focus of the current government’s economic team, which is trying to stimulate domestic demand,” he wrote in a note to clients.
Gross domestic product — the total value of all goods and services produced by a country’s economy — expanded by 2.2 per cent last year, down from 2.9 per cent in 2014, said the Office for National Statistics, confirming its initial estimate published last month.
GDP meanwhile grew by 0.5 per cent in the October-December period compared with the third quarter when in came in at 0.4 per cent growth. Again the data matched the statistic office’s initial reading.
“The fact that quarterly UK GDP growth… was left unrevised at 0.5 per cent was expected, but nonetheless comes as a bit of a relief given the jitters about the global recovery at the moment,” said Vicky Redwood, chief UK economist at Capital Economics research group. — AFP