Thailand's July outward trade fell 0.85 percent YoY, its fifth monthly contraction so far this year after expanding 3.9 percent YoY in June, led by smaller shipments of refined petroleum products and crude oil, down by 23.2 percent YoY and gold, down by 71.7 percent YoY. However, if those categories were excluded, July exports grew for the second consecutive month by 2.5 percent YoY, against the 3.5 percent YoY growth recorded in June, thanks to higher shipments to the US, EU and CLMV.
Looking ahead, it must be conceded that a fragile recovery in China's manufacturing sector and overall economy is an important factor that warrants close monitoring, while structural problem (that puts many export categories in an uncompetitive position amid changes in demand abroad) is another important factor that will likely inhibit our outward trade recovery.
Given the July contraction, there is a slim chance that Thai exports will be able to achieve a 3.0 percent growth for 2014 as in KResearch's base case forecast. Nevertheless, we will continue to assess signs from trade partners and key exports next month in order to revise our export growth forecast for 2014 later on.