Chart, trade balance and oil prices until july

The trade balance (exports-imports, FOB and CIF) went back in the red in july.

In july, the deficit was 762 millions USD.

Since january, the cumulated deficit is 446 millions USD (against a surplus of 4,5 billions USD during the same period of 2007)…

Oil prices went down in august. That should give some relief to the trade balance.

But watch out :

-the “tax cuts” party given by the gvt supports the demand, hence the imports
-the THB is going down… versus USD ! Therefore the oil bill will increase
-and last but not least… amount of exports… The worldwide slowdown is gaining pace… That will affect the thai exports… At one point…

(source Bank of Thailand, table EC_XT_011)

(to understand the differences between trades statistics, like total imports and imports CIF (BOP basis), read here).

2 Responses to “Chart, trade balance and oil prices until july”

  1. 1 Bob 7 September 2008 at 10:47 am

    As far as I understand, then the import-export trade balance include all service and goods transactions, right?
    Now, for the past 2 months foreigners have been selling Thai stocks in mass $30-100 million per day. Assuming these foreign investers are pulling their money out of Thailand, how does this affect the about $100 billion foreign reserve Thailand has?

  2. 2 ThaiCrisis 7 September 2008 at 12:34 pm

    Watch out Bob… the figures here are for trade of goods only.

    But on a BOP basis (it means without insurance and freight) it means imports CIF and exports FOB.

    If you want to get the services, then you need to look on the balance of payment.

    BOT table EC_XT_013

    And then if you want to see the balance of stocks, look at the line 55 of the same document (2.1 Equity securities).

    Now what are the effects of foreigners selling their thai stocks ? It puts pressure on the THB (because the foreigners sell thai stocks, get THB for them, and then convert those THB against foreign currencies to take the money out).

    So from my point of view, there is no direct effect on the international reserves of the BOT. But only indirect (if the BOT intervene to support the THB for instance, by selling part of its international reserves).

    This is how I understand the situation. feel free to correct me (I’m not an expert).

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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