Thailand's May exports hovered 42.1 percent growth YoY to USD16.556 billion, representing a 22-month record high. That figure accelerated over the 35.2 percent growth recorded in April, buoyed by a 521 percent surge in gold exports in May, continuing from hefty growth of 1,138 percent in April. If gold was excluded, however, May exports advanced 32.8 percent, up over the 26.6 percent pace recorded in April.
Most major export items in May registered double-digit growth. Meanwhile, May imports totaled USD14.345 billion, up 55.1 percent YoY, against the 46.0 percent growth in April. As a result, our trade balance in May logged the highest surplus in 12 months at USD2.211 billion, reversing a deficit of USD266 million in April.
Because of the higher than expected exports during 5M10, KASIKORNRESEARCH (KResearch) forecasts that our exports throughout 1H10 will have grown at least 34 percent. It is also highly likely that exports growth for the entire year will exceed over our current forecast of 17.0-24.0 percent.
Nevertheless, in the face of a fragile recovery in the global economy due to the sovereign debt crises in several European nations that have triggered fears of a double-dip recession in certain countries, KResearch will continue monitoring related developments over the next few months before undertaking any revision in our export growth projection again.
Aside from risks stemming from the public debt crises in Europe that could cause our exports to slow, it is expected that Thai exporters also will face other impediments, including the appreciating trend of the Baht and heightened price competition versus their products and the increased bargaining power that international buyers have gained from the situation. Moreover, production costs will likely be driven by upward trends in fuel prices and interest rates. With these constraints, Thai exporters should be prepared for changes in the overall business environment in 2H10.