A delayed recovery in Thai exports – contrary to accelerating imports – could extend into 2H12 and result in our continuous trade deficit. According to a recent report by the Ministry of Commerce, July exports contracted for the second consecutive month, down (-)4.5 percent YoY. Despite beating a market forecast for a (-)5.8-percent contraction, the July export performance is poorer than the (-)2.3-percent figure for June. Meanwhile, imports grew 13.7 percent YoY, higher than the 2.6-percent increase in June. Unsatisfied Thai export performance has resulted in our trade deficit of USD1.75 billion in July, continuing from the USD546.3 million deficit in June.
Having studied the export trend, KResearch has found that stagnation in the recovery of our exports has settled in since the end of 2Q12 when a number of export markets were overwhelmed by the Euro crisis. Therefore, KResearch expects that fragile demand from trade partners and a competitive disadvantage of some Thai exports could slow our export recovery path further into the end of 3Q12, whereas the recovery should become clearly evident during 4Q12, given the low base of last year.
KResearch has thus reduced our export growth forecast for 2012 to 7.0 percent growth, or within a range of 5.0-9.0 percent.