Thai exports in December 2010 showed healthier than expected performance. The export value stood at USD17.372 billion, growing 18.8 percent YoY. Despite slowing from the 28.5-percent growth of November, the data was better than the consensus. Meanwhile, imports for December totaled USD16.078 billion, a YoY increase of 11.5 percent, down from the 35.3-percent growth recorded in November. With imports being outpaced by exports, we achieved a trade surplus in December of USD1.29 billion, beating the USD408 million of November.
Overall, exports in 2010 were worth USD195.31 billion, growing 28.1 percent YoY, while imports totaled USD182.40 billion, an increase of 36.5 percent YoY. This put our trade surplus at USD12.905 billion.
The excellent export performance during the final two months of 2010, continuing over-month, was in line with global economic data that pointed to continued expansion. Global economies were less affected by negative factors than expected, especially amid the sustained US economic recovery. This trend should thus be quite positive for Thai exports in 2011. Even though an export slowdown seems inevitable, our shipments may fare better than expected. KASIKORN RESEARCH CENTER (KResearch) has therefore revised upward our export growth projection to 8.0-12.0 percent (from the 6.0-10.0 percent projected earlier) and our projection for import growth to 12.0-16.0 percent (from 9.0-12.0 percent forecast earlier).
With imports likely to show higher growth than exports, Thailand's trade surplus in 2011 is projected to drop to USD7.0-9.7 billion from USD 12.9 billion in 2010 (based on Customs Department data). At the same time, our current account surplus may decline to USD8.0-11.3 billion, from the USD14 billion seen in 2010.
For the effect of rising Baht on exporters' income, the less strong bias of Baht seen recently, together with an upward revision in our projection on exports in USD, has prompted KResearch to forecast that shipments in Baht terms may continue to show growth, if the Baht does not rise sharply. If the Baht is stable at the current level throughout 2011 (the average in January 2011 has so far been THB30.4/USD), our exports in Baht may grow around 3.5-7.5 percent. If the Baht averages a rise of THB1/USD this year, shipments in Baht may see growth of only 0-4.0 percent. Such a figure, nonetheless, would be better than the negative growth earlier feared.
In addition to economic uncertainties with key trade partners, i.e., the US, China, Eurozone, as well as forex trend, close attention should be paid to commodity prices, trade measures to be imposed by trade partners, in particular, GSP renewals by the US as well as higher value-added taxes in Europe and other non-tariff barriers (NTBs).
In a positive note, exports may be supported by expanded production (especially in the automotive, electrical appliance/electronics and petrochemical industries). Penetration into neighboring markets, i.e., ASEAN, China and India will also provide greater opportunities for Thai exporters to access larger and more affluent marketplaces.
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