Thailand’s current account turns positive
Thailand’s current account returned to positive territory in August 2013 for the first time in four months, erasing a deficit that had worried investors and hurt the Thai currency, the Wall Street Journal reported.
Thailand is a major agricultural exporter and normally runs a surplus in its current account, signaling that exports are greater than imports. But the current account swung to a $6.7 billion deficit in the second quarter from a $1.5 billion surplus in the first three months of 2013. Lower commodity prices pinched exports, while high local household credit growth meant imports of consumer goods remained strong.
That deficit worried investors as it meant Thailand needed more short-term foreign capital to make up for the shortfall. Since the summer, investors have moved money out of Thailand in anticipation of higher US rates, leading to declines in the Thai baht and local stocks.
But earlier in September, the US Federal Reserve said it would continue to support the US economy by maintaining its massive bond-buying programme, which has pushed US yields back down and made emerging-market assets relatively more attractive.
Thailand’s return to a current account surplus is likely to add to a more optimistic outlook. Thailand’s baht already is up 3 per cent this month, reflecting the Fed’s continuation of its extraordinary monetary policy.
But it is still down nearly 3 per cent since the start of 2013, and some analysts said concerns remain. Thailand still is likely to run a current-account deficit for the full year and its household debt remains high, at 80 per cent of gross domestic product.
Thailand’s current account, which also includes transfers of income in and out of a country, benefited from stronger exports and weaker imports. Exports grew 2.5 per cent on year in August to $20 billion, while imports fell 2.5 per cent to $17.8 billion.
Thailand's current account returned to positive territory in August 2013 for the first time in four months, erasing a deficit that had worried investors and hurt the Thai currency, the Wall Street Journal reported. Thailand is a major agricultural exporter and normally runs a surplus in its current account, signaling that exports are greater than imports. But the current account swung to a $6.7 billion deficit in the second quarter from a $1.5 billion surplus in the first three months of 2013. Lower commodity prices pinched exports, while high local household credit growth meant imports of consumer goods remained strong....
Thailand’s current account returned to positive territory in August 2013 for the first time in four months, erasing a deficit that had worried investors and hurt the Thai currency, the Wall Street Journal reported.
Thailand is a major agricultural exporter and normally runs a surplus in its current account, signaling that exports are greater than imports. But the current account swung to a $6.7 billion deficit in the second quarter from a $1.5 billion surplus in the first three months of 2013. Lower commodity prices pinched exports, while high local household credit growth meant imports of consumer goods remained strong.
That deficit worried investors as it meant Thailand needed more short-term foreign capital to make up for the shortfall. Since the summer, investors have moved money out of Thailand in anticipation of higher US rates, leading to declines in the Thai baht and local stocks.
But earlier in September, the US Federal Reserve said it would continue to support the US economy by maintaining its massive bond-buying programme, which has pushed US yields back down and made emerging-market assets relatively more attractive.
Thailand’s return to a current account surplus is likely to add to a more optimistic outlook. Thailand’s baht already is up 3 per cent this month, reflecting the Fed’s continuation of its extraordinary monetary policy.
But it is still down nearly 3 per cent since the start of 2013, and some analysts said concerns remain. Thailand still is likely to run a current-account deficit for the full year and its household debt remains high, at 80 per cent of gross domestic product.
Thailand’s current account, which also includes transfers of income in and out of a country, benefited from stronger exports and weaker imports. Exports grew 2.5 per cent on year in August to $20 billion, while imports fell 2.5 per cent to $17.8 billion.
