Exports of goods and services for December 2010 were up 18.8 per cent on the same month last year to stand at 516 billion baht (US$17.37 billion), Commerce Minister Porntiva Nakasai said.

At the same time the government has set a draft budget for 2011 of 2.88 trillion baht, with a small spending deficit.

However, the Excise Department has warned that any decision to cut the tax on diesel, to keep the pump price below 30 baht in the face of rising global prices, could have a severe affect on government revenue.

Imports totalled 484.09 billion baht (US$16.08 billion), an increase of 11.46 per cent from December last year, giving the country a trade surplus of 32.57 billion baht (US$1.29 billion), Mrs Porntiva said.

Exports totalled 6.17 trillion baht (US$195.31 billion) in 2010, up 18.9 per cent year-on-year, an all-time high. Imports also increased, by 36.47 per cent, to 5.84 trillion baht (US$182.41 billion), with a total trade surplus of 337.03 billion baht (US$12.90 billion), the minister said.

In December, exports by the agriculture and agricultural industrial products group went up 23 per cent from the same month last year. Major items of the group were rice (up 46.7%), rubber (up 39.3%) and food (up 20.4%). Exports of tapioca were down 9.2 per cent and sugar down 95.6 per cent due to a decline in output and an increase in domestic demand.

The exports of manufacturing goods were also up, by 20 per cent, in December. Major industrial products included plastic pellets and products (up 37.8%), rubber products (up 27.9%), textiles (up 19%), electrical appliances (up 17.6%) and gems and jewellery (up 154%).

The exports of the agriculture and agricultural industrial products group in 2010 were up 26.5 per cent year-on-year. Major items were rice (up 5.8%), rubber (up 83.4%), food (up 14.4%), tapioca (down 42.2%) and sugar (down 19.9%).

The exports of industrial products increased 28.2 per cent last year, with the biggest expansion being automobile exports (55.2%), followed by rubber products (43.4%), plastic pellets and products (36.2%), electronic products (21.9%), gems and jewelry (19.4%) and textiles (19.2%)

Mrs Porntiva said major export markets expanded 28.4 per cent in 2010, including the US (21.2%), the European Union (19.7%), Japan (29.8%) and Asean (38.6%).

The minister said the country’s minor export markets also expanded 26.7 per cent last year. They were as Hong Kong (38.5%), Taiwan (43.5%), South Korea (28.1%), Canada (13.9%) and Australia (12.1%).

Thailand’s new exports markets expanded 28.5 per cent in 2010. They included Indochina which expanded by 31.2 per cent, the Middle East (11.5%), Africa 6.6%), Latin America 70.5%), Eastern Europe (37.7%), South Asia (32.7%) and China (33.2%).

Mrs Porntiva expected the country's exports to expand by about 10 per cent this year.

Excise Department director-general Pongpanu Svatarundra said if the government orders his department to cut the tax on diesel by one baht a litre, from the current five baht, the department’s annual revenue will be reduced by 18 billion baht.

Mr Pongpanu said his department was ready to comply with the government’s policy to cut diesel tax to help keep the price below 30 baht a litre.

He believed to global oil price hike would be only short-lived and prices would return to normal after the northern winter.

The director-general said the state Oil Fund would be able to subsidise diesel only up to the end of February.

His department’s revenue target for 2011 is set at 425 billion baht and a diesel tax reduction would certainly affect the revenue target for this year and next.

The department’s revenue from excise taxes on fuel collection totaled 150 billion baht last year. Of the total, 90 billion was from diesel and the remainder from petrol and liquefied petroleum gas (LPG), he said.

Deputy Prime Minister for economic affairs Trairong Suwannakhiri said the state budget for fiscal 2011 is initially set at 2.88 trillion baht with a budget deficit of 380 billion baht.

Mr Trairong said the draft budget will be proposed to the cabinet meeting next week.

The government is expected to collect 1.9 trillion baht in revenue, he said.

The budget assumed that the country's economy this year will expand four to five per cent year-on-year and inflation will rise three to four per cent, he said.

The Budget Bureau will find ways to help cut the budget deficit further to achieve a balanced budget, he added.

Source: Bangkok Post