WSJ Real Time economics says Thailand‘s export decline, is tapering off. WSJ says, A fall in exports would hardly seem reason for Thailand to celebrate, but there are signs that the slump in demand from its key trade partners is easing, a picture reflected across Southeast Asia. Thailand’s exports slipped 1.5% on-year in July and rose only 0.6% in the January-July period. But that was better than declines of 5.3% in May and 3.4% in June, reflecting the fact that demand from China, Japan, the U.S. and E.U. – Thailand’s four largest export partners – is improving. The story of choppy but gradually improving exports has been echoed around Southeast Asia. Vietnam on Monday reported a robust 11.6% on-year rise in August exports, slightly softer than July’s 13.7% gain but still strong. In Singapore, non-oil domestic exports improved to a 0.7% on-year fall in July, after June’s 8.9% drop. Indonesia’s exports fell 4.5% in June from a year earlier after dropping 8.6% in May, while Philippine exports rose 4.1% in June following a 0.8% fall in May. In Malaysia, June exports contracted 6.9% compared with May’s 5.8% fall, but that was better than economists’ expectations for 7.5% contraction. “The signs are that things are looking a little bit better, but whether one country will benefit will vary within the region, and a lot has to do with the domestic policies in place,” said Euben Paracuelles, Southeast Asia economist at Nomura. Mainly that has to do with an economy’s degree of openness to world trade: As the most open economy in the region, Singapore is best positioned to benefit from reviving global demand, Mr. Paracuelles said. It’s followed by Malaysia, which also stands to gain from improving commodity prices. In addition to a strengthening U.S. recovery, recent data out of China suggest the Asian giant is regaining its footing after several quarters losing momentum. Last week, HSBC’s China manufacturing purchasing managers index rose to a preliminary 50.1 in August – indicating a modest expansion of manufacturing activity –from 47.7 in July. “The latest data for China have been fairly positive, which bodes well for Thai exports,” said Crystal Tan, economist at Capital Economics. Indeed, the Thai data showed shipments to China down just 5.1% in July, much improved from June’s 16.7% slump. Still, Mr. Paracuelles said that although Thailand’s exports should continue to gradually improve as the year progresses, domestic demand has decelerated steeply — suggesting the Bank of Thailand may need to cut interest rates again this year.
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