With the recovery of the Thai manufacturing sector and a boost from falling prices for many Thai export items, our May exports improved, turning to report growth at the rate of 7.68 percent YoY. Meanwhile, imports rose 18.17 percent YoY due to many factors, such as falling commodity prices and rising raw material imports in line with better industrial production that returned to normalcy. Accelerating imports have resulted in a trade deficit for third consecutive month at USD1.7397 billion.
Almost all of our key export markets in May 2012 improved MoM, particularly to the Eurozone market that returned to grow for the first time in eight months. During 5M12, Thai exports to China and ASEAN showed outstanding expansion. Among the main export markets, only the US showed growth. Meanwhile, shipments to Japan and Europe contracted.
Products that may be directly affected by the Eurozone debt crisis include the jewelry category and garment, whereas this crisis may indirectly hurt computers and parts, electronic equipment, rubber and products, plastic resin and chemical products. However, automotive products and parts, air conditioners, electrical appliances, some instant foods as well as refined oil will likely grow further over the remainder of this year.
For the outlook, KResearch estimates that although the proportion of Thai exports to Eurozone have accounted for only 10 percent of the entire Thai exports since early 2012, sluggish exports may inhibit Thai economic growth momentum during the upcoming months due to our high reliance on exports. All in all, KResearch expects that Thai exports to the Eurozone will likely contract by 5.0 percent this year. For entire year of 2012, KResearch is maintaining our previous forecast at 10 percent (a range of 7-15 percent), with a major boost from exports to China and ASEAN that likely continue to grow.