Thailand's outward trade remains robust with June exports growing surprisingly well to USD21.074 billion, which was close to a record high of USD21.259 billion seen in March 2011 when Thai exports began to slow due to the triple disaster in Japan. Exports in June increased 16.8 percent YoY, declining slightly from the 17.6 percent pace recorded in May. The impact of the Japan disaster was not as severe as thought before, since growing demand for many Thai products there has helped offset shortfalls in quake-affected categories, e.g., automobiles. As a result, Thai exports to Japan have continued to strengthen, growing even higher there than to other major markets, thus helping to bolster Thai exports over the past several months.
As for 2H11, it is expected that Thai exports may see lower growth of 11-21 percent, down from the 23.6 percent growth – at USD114.978 billion – in 1H11. However, the outlook remains promising, as some industries that have been hit by shortages of components from Japan are recovering quite fast. Shipments to Japan will continue to be supported by greater demand for Thai products, because their manufacturing sector is still facing power supply disruptions, while rebuilding efforts will create demand for some products. Based on the strong export figures recorded in the past months, KResearch expects that Thai exports in 2011 will grow perhaps 20 percent – and likely within a range of 17.0-22.0 percent – with a value expected to reach USD226-236 billion, representing about THB7 trillion at current exchange rates.
Nevertheless, Thai exports during 2H11 may be affected by a number of downside risks, including a slowing global economy undermined by a possible downgrade of the US's AAA debt rating and unresolved EU sovereign debt crises currently centering on Portugal, Ireland, Greece and Spain that could potentially hurt larger economies in the Eurozone. Moreover, Thai exporters will need to overcome numerous challenges, including the stronger Baht and higher production costs stemming from rising raw material prices, to remain competitive against global rivals.
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