High Export Growth in February despite High 2017 Base Record-breaking 41% Growth to Japan (Business Brief No.3733)

Despite a high 2017 base of comparison, February exports continued to expand for the 12th month Thailand's international trade data for February 2018 indicated a scenario of strong and continued recovery in foreign demand. Despite the high 2017 base because the 2018 Chinese New Year fell in February versus January in 2017, Thai exports recorded high 10.3 percent YoY growth, valued at USD20.365 billion. The main supporter of that satisfactory performance was strong momentum in key trade partners' economies that boosted their demand for Thai goods, both directly and indirectly via related supply chains.

• KResearch is thus upholding our projection on Thai 1Q18 export performance at not less than 10 percent growth YoY, to be mainly buoyed by ongoing global economic growth and an up-cycle in electronics product sales. Meanwhile, US trade protectionist initiatives via new import tariffs on steel and aluminum at 25 percent and 10 percent, respectively, may not adversely affect Thai exports in 1Q18. Based on their investigations into the effects of steel and aluminum imports on national security per Section 232 of the Trade Expansion Act, the US administration has imposed these new tariffs beginning this March on almost all US trade partners, except Canada and Mexico.
• However, Thailand's international trade sector will still encounter various other challenges over the remaining nine months of 2018, particularly with regard to the dynamics involved in US trade protectionism and volatility in the Thai Baht. Pending further developments toward the Thai export sector, we at KResearch maintain our export performance estimate for 2018 at 4.5 percent growth YoY.