Weaker trade data supported a view that the central bank may hold rates again next month. It kept its benchmark rate steady at 1.75 percent last month, pausing after two straight rises.
Analysts are divided: some predict a quarter-point rise at the Dec. 1 meeting, the last of the year, but others expect a rate pause as the central bank may want to see the impact of the baht's strength, flooding and global developments.
The Commerce Ministry said the global economic slowdown and strength in the baht had affected trade.
Key Points
- Exports +15.7 pct y/y in October (+20.0 pct in Reuters poll); imports +13.5 pct y/y (+20.0 pct in Reuters poll) -- Commerce Ministry
- Trade surplus $2.32 billion after a $3.07 million in Sep
- Exports to China +27.0 pct y/y (+29.3 pct in Sep)
- Exports to U.S +4.9 pct y/y (+17.0 in Sep)
- Exports to Japan +18.2 pct y/y (+30.0 pct in Sep)
- Exports to EU +10.9 pct y/y (+22.5 pct in Sep)
- Exports +29.2 pct y/y in first 10 months
- Click on [ID:nTST000153] for a table of the data
- Reuters poll.
Comments:
Radhika Rao, Economist, Forecast in Singapore:
"The disappointing external trade performance in October, with exports and imports down on sequential terms, shows a seasonal boost in demand did not pan out.
"Strong baht gains and sluggish demand from Western markets likely contributed to slower shipments. Manufacturing activity is likely to remain underwater in end-month data.
"Local manufacturers are presumably still in wait-and-watch mode, preferring to dip into existing inventory to meet current demand, as import growth undershot expectations for a third consecutive month. The resultant trade surfeit signals further appreciation pressure on the currency."
Nuchjarin Panarode, Economist, Capital Nomura Securities
"It is clear that the direction of export growth will slow in November and December due mainly to the base effect. Although the latest figures show slower-than-expected growth, the high level of trade surplus should be positive for the baht currency."
"For 2010, we have predicted export growth of 23.7 percent, a bit bearish compared with the released data.
"However, we are going to review our forecast after the announcement of GDP for the third quarter next week. It is possible to have an upside. If we revise up exports, the GDP forecast should be up, but only slightly. Don't forget that the fourth quarter should be hit by the flooding."
Usaja Wilaaipich, Economist, Standard Chartered in Bangkok
"October's trade data indicated clearer evidence that the country's exports, which have been a key driver of growth, appeared to have decelerated accordingly.
"Looking ahead, we expect export growth to lose momentum further in coming months and in the first half of 2011, due largely to moderating global demand. As a result, less support from external demand is likely to reduce Thailand's economic growth in Q4-2010 and H1-2011.
"This prospect, combined with the adequate existing spare capacity in manufacturing, should help keep inflation increasing slowly in H1-2011, and provide enough time for the BoT to not need to be in a rush for rate hikes amid the baht's appreciation at the moment."
Pimonwan Mahujchariy Awong, Economist, Kasikorn Research Center
"Both the Oct export and import figures were lower than what we expected. The slower Oct exports of 15.7 percent tells us that fears over a strong baht have started to impact exports in the fourth quarter and we expect more slowdown in coming months."
"Economic uncertainties of our trading partners, the baht rise along with concerns of more control measures will continue to keep a lid on growth while risk from inflationary pressures will like
