In June 2021, Thai exports hit its highest level in 11 years with robust growth of 43.82 percent YoY, above market expectations of 38.1-percent growth. While Thai exports in 1H21 grew 15.53 percent YoY, the level was not high in comparison to the export growth of regional rivals, which generally grew beyond 20 percent in the first six months of 2021. Shipments to key trading partners maintained strong growth at almost every export destination – particularly the United States and Europe, wherein economies are on a firm recovery path as business activity across numerous sectors slowly regains a sense of normalcy, thanks to accelerated vaccination programs. Meanwhile, shipments to other ASEAN countries continued to perform well from the previous month, despite the ongoing pandemic and strict COVID-19 prevention and control measures.
In the second half of 2021, Thailand's export growth will likely return to normal levels due to reduced low base effect and easing pent-up demand. As the global economic recovery has driven up demand for Thai exports, KResearch has upwardly revised our 2021 growth forecast for Thai exports, from 9.0 percent in June to 11.5 percent as of July 2021. Nevertheless, the Thai export sector can expect to face multiple challenges in the near future, especially from the high degree of uncertainty stemming from the current COVID-19 situation. Many countries are seeing surges in the number of daily cases, fueled by the Delta variant which is more contagious than earlier strains and has prompted authorities in many parts of the world to implement stricter COVID-19 prevention and control measures. If the pandemic intensifies and the outbreak in Thailand spirals further out of control, not only will export demand be affected but it may also lead to supply disruptions as labor shortages occur across the industrial sector. Such a scenario would spur greater anxiety and could weigh upon Thai exports going forward.