Thai exports to the USA in February posted growth for fourth consecutive month. The 19.3-percent export growth seen in February is the highest growth since July 2008, whereas January export growth was 15.9 percent YoY. It is expected that exports to the USA in 1H10 will show high growth due to a low base effect from last year. The increase in exports to the US market will help overall growth because the USA is a major export market, accounting for 9.9 percent out of all exports in 2M10, versus 12.6-percent export growth in 2007 (before the economic crisis started).
That accelerating growth of 19.3 percent was boosted by the US economic recovery and the low base effect. As a result, our exports to the USA in 2010 should improve. KASIKORN RESEARCH CENTER (KResearch) views that our exports to the US market in 1H10 will likely accelerate because of last year's low base, though in 2H10 the exports may decelerate due to the higher base in 2H09. Exports to the USA in 2H09 had improved in line with the more apparent US economic conditions, particularly in the US 4Q09 economic growth of 5.9 percent YoY – their highest growth in six years.
However, some risks for Thai exports to the USA that should be monitored include a strengthening trend in the exchange rate value of the Thai Baht versus the US Dollar, which may erode our price competitiveness (particularly if the Baht rises more than other currencies). Meanwhile, the continuing US economic recovery, boosted by their economic stimuli remains fragile. The problem of high unemployment likely to remain at 9 percent throughout 2010 and their high fiscal deficit may require the US to curtail economic stimuli and tighten monetary policy. If so, US economic growth may decelerate and US consumption could then weaken. In the end, lower consumption would affect Thai exports to the USA in 2H10. Major Thai exports to the USA that are unlikely to recover much would include textiles, garments, electric appliances, etc.
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