Although our exports resumed growth at 1.9 percent YoY in December 2013, their value fell over-month, further denoting the delay in their recovery during 2013. As a result, overall outward trade during 2013 fell for the first time in four years to 0.3 percent growth, equivalent to USD228.5 billion, well below the 3.0 percent growth reported for 2012.
During 1Q14, we at KResearch expect that our exports will contract perhaps 2.0 percent YoY, due to a high 2013 base. However, since shipments to the US and EU should gradually bounce back from 2H13 onward, we expect that 2014 exports will grow approximately 5.0 percent, or between 3.0-7.0 percent over the year amid some possible headwinds, including currency crises in some emerging economies.
Meanwhile, improving economic conditions in the US, Europe and Japan will likely benefit trade with ASEAN, East Asia and Australia. This coupled with bright opportunities within African and Middle Eastern markets should help bolster demand for Thai industrial exports such as durable goods, fashion apparels and intermediary goods. Moreover, agricultural and agro-processed product exports will likely recover since their impediments to sales last year should ease.
A gradual increase in international purchase orders should largely put Thai exports back on track, but the pace of any recovery will largely depend on key trade partners' economic prospects, plus political and economic developments in other emerging markets, being factors that have affected the pace of the global economic recovery, too. In any case, Thai exporters are being urged to find ways to address production constraints, especially those related to labor and new technologies so that they can accommodate more purchase orders. They should also seek to reassure foreign buyers so that they have confidence toward placing orders amid political uncertainty here.
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