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20 Jul 2018


Thai exports in 1H18 rise 11%...and are expected to grow 8.8 % in 2018, with limited impact from the ongoing trade war this year (Business Brief No.3752)

Thailand recorded a trade surplus of USD1.579 billion in June 2018 because the import value grew at a slower pace compared to the growth in export value. 
  • Thai exports in June continued to expand well, increasing 8.2 percent or totaling USD21.78 billion. However, the growth rate slowed down compared to the yearly growth rates of around 11-12 percent YoY in the previous 1-2 months. The key factors contributing to export growth in June included the sustained momentum of recovery in economies of trading partners, cycle of electronic products and higher crude oil prices in June 2018 over-year which pushed the value of oil-related export products.
  • Nonetheless, the growth rate of Thailand's outbound shipments decelerated from the previous months partly due to the high base effect of last year, as well as the contraction of passenger car exports. In addition, the export values of frozen, canned and processed seafood exports from Thailand further dropped in line with declining shrimp prices due to a higher supply of shrimp products in the world market.
  • Thai imports in June valued USD20.201 billion, up 10.8 percent, which is lower than the previous market expectation of 14.3 percent, partly due to a sharp drop of semi-finished product imports over-month because of a reduction in oil crops and gold imports.  

Overall, Thai outbound shipments in 1H18 rose 11.0 percent over year. The growth is attributed mainly to the sustained momentum of economic recovery and the cyclical uptrend of electronic products, which are also expected to drive Thai exports in 2H18.  The expansion rate in 2H18 however is expected to proceed at a slower rate at 6.8 percent or an average monthly export value of USD21.939 billion. The deceleration is attributable to the higher base last year, coupled with the fact that prices of many commodities are likely to stay at similar levels to those registered in the same period last year.

                 With regard to the escalating trade tensions, after the US and China announced  tariffs on USD50 billion of goods to retaliate against each other, KResearch views that the impact from the dispute this year will be limited with the net impact worth around USD280-420 million on Thai exports. Overall, KResearch expects Thai outbound shipments in 2018 to rise 8.8 percent. On a cautionary note, close attention should be paid to Washington's plan to impose tariffs on an additional USD200 billion of imports and more retaliatory moves from Beijing. If these trade measures are executed, they may adversely affect Thai exports in 4Q18.