Japan disaster may shrink Thai exports

[KoratCat]

Japan disaster may shrink Thai exports

BANGKOK, March 16 - Thai exports to Japan are likely to fall by 7.2 per cent if Japan's economic growth drops by one per cent, according to University of the Thai Chamber of Commerce (UTCC) Center for International Trade Studies.

As Japan is Thailand's second largest market for exports, the Japanese economy shrinking by one-per cent will create estimated losses to Thai exports of about US$730million-1.4 billion in value, and will affect overall Thai exports to world markets by 0.3-0.7 per cent, said centre director Aat Pisanwanich.

Prior to Japan's recent natural and nuclear disasters, Thailand aimed to export goods to the country valued at US$22 billion, while it expected to expand export figures in general by 12 per cent.

As for exported items to Japan, agricultural merchandise is heavily affected. Meat and processed seafood count for about 7.5 per cent, while sugar is 6 per cent, and agricultural produce at 8.7 per cent. Industrial goods to be most affected are electrical machinery and rubber products.

Due to the combined disasters, Japanese stocks dropped over 10 per cent Tuesday, with the falls of Monday and Tuesday wiping away US$720 billion from the market, according to the Associated Press.

However, Tokyo shares are up 6.23 per cent Wednesday on bargain hunting following the biggest two-day sell-off on the Nikkei index for 24 years on fears of the threat of nuclear meltdown after the huge earthquake.

Japan's central bank injected more money into its financial system Wednesday, the third day in a row, to deal with the situations, while billions of dollars will be needed to rebuild homes and infrastructure--an advantage to construction companies but which will increase the national debt.

Damage estimates are up to US$183 billion, amounting to as much as 3 per cent of Japan's gross domestic product, according to Credit Suisse economist Hiromichi Shirakawa and analysts at Barclays Capital, whereas other experts said the Japanese economy will contract for two straight quarters.

(MCOT online news, Agencies)