Thai current account surplus probably widens on rising tourism

Thailand’s current account surplus probably widened in November as tourists returned after the Dec. 2005 tsunami and the value of rubber and car exports increased.

The $635 million monthly surplus compared with $69 million in October, according to the median forecast of six economists in a Bloomberg survey. The central bank is due to report the figures on Dec. 30 at 3 p.m. in Bangkok.

Travelers from Germany, Sweden and other European countries are returning to the beach resorts of Phuket and Krabi a year after the Dec. 2005 tsunami killed more than 5,000 people in Thailand. Vehicle and rubber exports are also increasing, helping to improve the current account surplus in Southeast Asia’s third-largest economy.

“There have been a strong rebound in the number of tourists to Phuket and Krabi,” Vichit Na Ranong, president of Tourism Council of Thailand, a trade group of tourism businesses, said in a phone interview on Dec. 26. “The hotel room occupancy in the two provinces is as high as 80 percent compared with only 10 percent in January 2005.”

Prime Minister Thaksin Shinawatra’s government organized a day of mourning on Dec. 26 in Thailand, where about half of the 5,395 people confirmed killed were overseas visitors. Tourists joined mourners at ceremonies in Phuket, Krabi, Phang Nga and three other coastal provinces which were hit by the tsunami.

Thailand also normally reports the highest number of overseas tourists between November and January, when Europeans and Japanese travel to southern hemisphere countries including Thailand for warmer weather during their winter.

Exports

The November current account surplus was also helped by a rebound in exports growth and a reduced imports bill. Thailand posted a trade surplus of $55.3 million in November, from a deficit of $185 million in October, the commerce ministry said on Dec. 19.

“Economic growth in China, Japan and U.S. will continue to boost Thailand’s exports in 2006,” said Thanavath Phonvichai, an economist the University of the Thai Chamber of Commerce. “Automobiles will be the key leader in exports because of increased investment on new plants by Toyota and other automakers.”

Thailand’s vehicle production may rise 26 percent to a record this year, as manufacturers such as Toyota Motor Corp. and Ford Motor Co. continue to export trucks and demand for cars from Thai consumers strengthens, Thaksin said on Dec. 17.

Thailand-based assemblers produced 1.03 million vehicles in the first 11 months of this year, the Thai Automotive Club, a trade group of carmakers, said on Dec. 21. That was the first time the country’s automobile production has topped 1 million units in a year.

By Bloomberg

December 29, 2005   Posted in: Thailand