Thailand's international trade improved over-month in March 2013, achieving 4.55 percent YoY growth with a total value of USD20.77 billion. Imports, on the other hand, slowed to USD21.64 billion, reversing into a contraction of (-)11.52 percent. Imports increased less than exports, Thailand thus registered a smaller trade deficit in March at USD867 million, versus USD1.58 billion in the February. As for the 1Q13 external trade overview, exports totaled USD56.97 billion, up 4.26 percent YoY. Imports gained 8.44 percent YoY, with a total value of USD64.88 billion. Accordingly, Thailand logged a trade deficit of USD7.9 billion in 1Q13.
Despite the expansion seen in 1Q13 exports, we at KResearch are of the view that mounting pressures affecting exporters during 1Q13 will most likely continue and increase over coming months. The Baht, in particular, has been rising rather rapidly since early April, compared to the currencies of exporting rivals, leading to export-led businesses here facing lower Baht earnings. This will probably affect some decisions toward their acceptance of purchase orders later on this year.
Taking into consideration other damaging factors, e.g., an erratic global economy and higher input costs, export performance will likely see greater challenges in the immediate future. In view of this, we have slashed our 2013 export growth estimate to 7.0 percent, or within 4.0-9.0 percent, versus our previous estimate of 8.0-13.0 percent.
Baht appreciation aside, Thai exports may revive in 2H13 in line with a happier global economic situation that should include some rebounds, especially in China and Japan. If current trends continue, some of our exports will likely achieve growth. They would include consumer products – particularly agricultural produce and agro-processed goods – as well as industrial products relevant to investments and the construction sector, e.g., steel products, plus machinery and parts. The same is expected for automobiles and autoparts.
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