Weak signs suggesting that full recoveries are unlikely within key trade partner economies this year – particularly in China – have weighed on our May 2013 exports. Despite 2.89 percent growth YoY in April, May shipments to China – currently our largest export destination – showed another contraction over the last three months at (-)5.25 percent YoY, worse than the previous (-)4.35 percent estimate. Exports, excluding gold, were down (-)6.0 percent in May, reversing from 3.3 percent growth YoY in April.
Agricultural exports continued a downward trend with a contraction of (-)18.60 percent YoY, led by rice, rubber, shrimp, chicken and sugar. Contractions were also seen in industrial products, which dropped (-)0.15 percent YoY, as export values declined on some principal categories, e.g., computers and parts, integrated circuits, electrical appliances and parts. However, expansion continued in automotive exports, chemical products, rubber products and plastic resin, as well as machinery and parts.
The pace of imports during May was also on a downtrend as they fell (-)2.14 percent YoY (after gaining 8.91 percent in April), following a drop of (-)1.90 percent YoY in capital goods and a (-)7.12 percent YoY fall in raw/semi-finished materials. According to the Customs Department, Thailand sustained a trade deficit of USD2.30 billion in May, versus USD4.14 billion in April.
As for 2H13 outlook, KResearch has evaluated that our export recovery may not hasten as soon as hoped for, given fragile situations in key trade partner economies, most notably China and Europe, as well as tough competition through which several agro-product categories from Thailand have to forge. By virtue of these factors, we at KResearch are revising our export growth forecast down to 4.0 percent over 2013, from our earlier estimates at 7.0 percent.