Thailand's exports in August 2010 rose to USD16.452 billion, beating the USD15.565 billion recorded in July. Thus the August export value increased about 3 percent MoM, seasonally-adjusted, versus a decline of 13.4 percent MoM, seasonally-adjusted, in July. When compared to 2009, August exports advanced 23.9 percent YoY, improving over an over-year growth of 20.6 percent in July. Excluding gold that saw a sharp decline in August, our outward trade expanded 26.2 percent YoY, bettering the 21.9 percent growth in July.
These improvements were attributed to continued growth in exports of automotive vehicles, radio receivers, air-conditioners, machinery (including components of the foregoing), as well as rubber, rubber products, polymers, non-gold jewelry and ornaments, etc.
The August export figure may signal continued growth in Thailand's outward trade over the remaining months of 2010, though the slowing recovery in global economy recovery and the Baht's appreciation may moderate it somewhat. Nevertheless, it is expected that growth will continue due to several factors, including planned production relocations to Thailand by multinational companies, and higher farm produce prices due to lower supplies in the global market that may help ease pricing competition. Those factors should alleviate the impact of the Baht's appreciation. In addition, expected growth in most Asian economies relative to those in other regions may help sustain positive growth in our export over the near-term.
KResearch expects that our exports may grow in a range of 17-20 percent YoY in 3Q10, then experiencing a sharp decline to perhaps 10 percent if the global economic recovery continues to stagnate amid a rapid appreciation of the Baht. For 2010, overall exports would probably grow around 22.0-27.0 percent.
Meanwhile, key issues that must be monitored closely include foreign capital inflows into our stock and bond markets, which depend on investor sentiment toward Asian economies; however, if the global economy persists in stagnation, then market volatility may result in capital outflows toward lower risk havens, therein weakening the Baht. Another development would be possible action by the Bank of Thailand to stem the Baht's rise, such as measures to facilitate overseas investments and capital outflows, plus controls over short-term capital inflows.
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