Over the first eight months of 2018, Thailand's border trade and transit trade were valued at THB922.312 billion, growing 6.5 percent YoY. Although growth was slower than the 9.8-percent pace reported in 2017, KResearch views that the THB-denominated amount of our border trade and transit trade for the entire year will increase around 7.5 percent, given high oil prices and foreign exchange rates that will likely soften compared to the previous year.
Thailand's border trade tends to grow further amid changes in the trade structure. KResearch forecasts a compound annual growth rate of 11.5 percent over the next five years, against the 6.4-percent growth between 2010-2017. In addition, the border trade value in 2023 will likely double the 2017 amount. Support factors are as follows:
- Connectivity of value chains between Thailand, China and Vietnam, especially in the electronics industry will boost the border trade of the three countries. Additionally, China is pushing forward its IT industry through its “Made in China 2025" strategy, while global demand for mobile phones and other smart electronics devices is growing well. As a result, China, as well as Vietnam, will likely demand more electronic parts from Thailand.
- E-Commerce that is expected to surge more rapidly will be an important trade accelerator of Thailand's cross-border trade. Our potential to serve as a logistics hub will likely boost ASEAN's import of Chinese goods and assist in Thai businesses establishing their presence in Chinese market, mostly in the form of B2B (business-to-business). With our CLMV neighbors, e-commerce activities will also increase with the help of greater internet access of the public and development of their e-payment systems. Such border trade with CLMV countries will mostly be in the B2B (Business-to-Business) pattern.