Business

Thailand exports fall in April as global demand slows

A worker in a factory in Thailand
Image caption Manufacturing and export sector are key contributors to Thailand's economic growth

Thailand has reported a surprise fall in its exports for April because of falling demand from key markets such as Europe and the US.

Shipments fell 3.7% from a year earlier. Many analysts had forecast an increase of more than 3%.

The data comes just days after the World Bank warned that the eurozone debt crisis was a threat to export-dependent economies in Asia.

Analysts said exports could come under further pressure in the near future.

"The eurozone's ongoing problems will continue to drag on Thai exports and this is a factor to watch," said Kampon Adireksombat, a senior economist with Tisco Securities.

Domestic demand

Thailand relies heavily on its export sector to boost growth, with foreign sales accounting for more than half of Thailand's gross domestic product.

However, the sector has been hurt by a combination of factors in recent times.

Excessive flooding last last year caused damage to factories and businesses, hurting production and foreign shipments.

While firms have started to recover from that setback, demand from key markets such as the US and Europe has been falling because of economic problems in the those regions.

Analysts said Bangkok needed to focus on boosting domestic consumption, in a bid to offset a drop in exports and sustain growth in the long run.

"The key factor to monitor is domestic demand, and whether investment and consumption will pick up in a strong enough manner to offset export weakness," Santitarn Sathirathai of Credit Suisse.

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