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9 Aug 2016


Thai Exports to US to see 1.6% Growth in 2H16 and 0.2% for 2016 (Current Issue No. 2760 Full Ed.)

This year, the US economy has emerged stronger than its counterparts, showing constant growth with 2H16 GDP (preliminary report) of 1.2 percent growth QoQ, SAAR (seasonally-adjusted annualized rate). That number came out lower than projected, but was good enough to have edged up over the 0.8 percent growth QoQ, SAAR, in 1Q16, driven chiefly by domestic consumption. Thanks to that, our exports sent there resumed growth of 0.6 percent YoY in 2Q16 after having contracted 3.2 percent in 1Q16.
KResearch forecasts exciting prospects in four export categories. These four, which account for 45 percent of Thailand's aggregate shipments to the US, may have a major role in ensuring growth in our exports over the remainder of 2016. Those categories are 1) rubber products, which have high added value and can sell well in the US; 2) technology products, e.g., those related to computers and electronics, which continue to bring in revenues amid rising US consumption, although adjustments will be needed as competitors step up their production; 3) agro produce and industries entitled to GSP import duty rates that should remain strong for another year; and 4) seafood, which should gain traction on a rebound in production here, plus an improved image after being taken off of the Tier 3 List in its TIP Report.

While some production relocations have caused declines in certain export items, e.g., television sets/components and clothing, spoiling our export performance to the US, there are other positive factors that merit a better outlook. KResearch is of the view that our 2H16 shipments to the US are set for growth of 1.6 percent YoY as a result of the strong US economy. Given that, we project that our total export value sent there will probably reach USD24.1 billion, inching up 0.2 percent, or somewhere between (-)1 percent to 1 percent growth, which would translate to USD23.8-24.3 billion in receipts. Our exports registered 0.7-percent growth in 2015. With realization of the above projection, the US would thus remain Thailand's most lucrative export destination for the second consecutive year, leaving China and Japan further behind.

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