October exports reverted to a contraction of 4.2 percent in value, suggesting that markets globally have not fully recovered. As a result, the value of our outward trade during 10M16 shrank 1.0 percent YoY. The dip in October shipments was due primarily to shrinkages in several key export categories, e.g., air conditioners, computers/equipment/components, agricultural products, petrochemicals and related products. However, auto-parts, fishery and rubber product exports all reported significant growth during October and that should continue into 4Q16.
For the final two months of 2016, we at KResearch are of the view that demand for Thai goods abroad will likely be subdued owing to the fragile global economy, particularly in China, being our major trade partner. Moreover, steepening volatility in global financial markets – amid speculation towards a Fed Funds rate hike in December – will likely dent global gold prices steadily. However, Thai export growth should rise into positive territory for those months, given a low 2015 base. Thus, we expect Thailand's 2016 exports to contract only 0.5 percent YoY.