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22 Apr 2019

Trading

1Q19 Thai Exports Contracted 1.6% on Slowing Global Economy, but Shipments May Revert to Growth in 2H19, Bringing 2019 Export Growth to 3.2% (Business Brief No.3797)

       The value of Thai merchandise exports reached USD21.44 billion, shrinking 4.9 percent YoY in March 2019. Given this, Thailand's outward trade overall contracted 1.6 percent YoY during 1Q19, as expected by KResearch. The major factors attributing to the contraction in March shipments, in particular to the US, EU (28) and China, included the anemic global economy. However, Thai exports to Japan grew favorably at 7.4 percent YoY in March, led by electrical appliances and processed chicken products.  

        The sluggish computer demand globally during 1Q19 was also a key factor causing exports of Thai computers, related equipment and parts to shrink by as much as 20.0 percent YoY in March 2019, representing the steepest contraction in 69 months.

        Looking into 2Q19, it is expected that the Thai export performance will be almost on a par with that seen during 2Q18 amid numerous challenges. These include the slowing global economy and a high 2018 base, resulting partly from a surge in crude oil price to USD80/barrel during 2Q18, which in turn bolstered the value of petroleum-related exports, such as plastic pellets, chemicals and refined petroleum products, while there were front-loading import and export activities before the US decided to raise tariffs on Chinese imports during 3Q18.

           Given this, we at KResearch have revised downward our growth projection for 2019 Thai exports to 3.2 percent or within a range of 2.5-3.5 percent, from the previous forecast of 4.5 percent, due mainly to the slowing global economy that may undermine our export performance throughout 2019. Although the US-China trade dispute remains uncertain, there are positive signs seen toward their compromise, which should help support the global trade during 2H19.