The international trade data released by the Ministry of Commerce on July 20, 2009 showed that Thailand's exports in June 2009 still recorded deep contraction, albeit at a slower pace than the previous month, totaling USD12.335 billion, shrinking 25.9 percent YoY, compared to the 26.6-percent contraction in May. The figure was USD11.665 billion higher MoM. Exports, excluding gold shipments, showed clearer improvement, contracting 24.9 percent, down from the 27.3 percent contraction in May. Meanwhile, imports in June totaled USD11.398 billion, declining 29.3 percent YoY, down from the 34.7 percent contraction in May when imports totaled USD9.251 billion. The trade balance for June posted a surplus of USD937 million, narrowing from the surplus of USD2.405 billion in May.
Overall, exports in 1H09 totaled USD68.207 billion, shrinking 23.5 percent YoY, whereas imports equaled USD57.216 billion, declining 35.4 percent YoY. As a result, the trade balance showed a hefty surplus of USD10.991 billion, against the trade deficit of USD812 million in 2008. Last month, the Ministry of Commerce revised downward their 2009 export projection to a 15.0-19.0 percent contraction.
Classified by product, exports of several product categories showed improved performance in June for the first time this year. Products that recorded considerable drops included electronics, electrical appliances, gems and jewelry (excluding gold shipments), chemical products, canned/processed seafood and rubber. Meanwhile, automobiles, parts and accessories thereof as well as rice were among the products showing only slight shrinkage. On the market front, China continued to perform well, shrinking by only 3.6 percent in June (compared to a 10.9-percent contraction in May) – a diminishing contraction for the fifth consecutive month.Other new markets including Vietnam and India also fared better. Key export markets that showed improvement were the G3 nations, comprising the US, Japan and the EU, even though deeper contractions were seen in shipments to the four ASEAN founding member countries.
KASIKORN RESEARCH CENTER (KResearch) forecasts that the Thai export performance in 2H09 may exhibit some improvement, possibly shrinking by 6-14 percent from the deeper contraction of 23.5 percent in 1H09, thus putting the 2009 full-year exports to a contraction of 14.5-19.0 percent.
This better performance can be attributed to the expected gradual global turnaround. It is of note that emerging economies will play a major role in the global recovery. Among them would be developing countries in Asia, led by China and India, plus African countries and the Middle East that are likely to be the first to emerge from the doldrums and resume healthy growth next year. KResearch notes that China will become the world's second largest economy, outpacing Japan, this year at the earliest, or next year, at the latest. Both the public and private sectors should thus brace for this change. Emphasis should be placed on market expansion to emerging economies whereas consumer-oriented marketing strategies should be adopted with established markets such as the G3.
Even so, there are still some risks that need close monitoring. The global revival remains fragile, especially amid high unemployment that will likely hamper consumption. It may thus take more than a year before the global economy fully resumes potential growth. Other downsides would include the appreciation of the Baht and the H1N1 flu pandemic that may indirectly lead to a variety of adverse consequences, e.g., concern of importing countries toward our exports, or delayed production as a result of ebbing productivity.
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