Unremitting Global Recovery Backing Thai Export Growth in May to 13.2% (Business Brief No.3685 Full Ed.)

Thai exports for May saw satisfactory growth for the third consecutive month, buoyed by price effects. The total export value was USD19.94 billion, up 13.2 percent YoY; however, exclusive of oil-related shipments, they grew 10.0 percent YoY.

Apart from price effects, the ongoing global economic and trade recovery was the crucial factor supporting this export performance, directly and indirectly, via trade partners' supply chains. Key economies – the US, EU (28 member nations) and China – have been improving continually, so their demand has risen. Outstanding growth was witnessed in various finished products, e.g., electrical appliances; foodstuffs, e.g., fresh/processed fisheries, processed chickens and fresh/frozen/dried fruits that rose 90.1 percent YoY, mainly as a result of rising shipments to China and via Vietnam to China. In addition to higher quantities of outputs in the market, a benefit of cross-border trade between Vietnam and China on a VAT privilege was also a boon for our exports.

Intermediate products also capitalized on improved global economy and trade via supply chains in China and Japan. In May, both countries continued to perform better, as evidenced by Japan's import and export growth at 17.8 percent and 14.9 percent, respectively. Outstanding Japanese shipments included automobiles and steel, which thus aided our exports of auto parts and components, iron, steel and other products. As for China, their imports and exports grew 14.8 percent and 8.7 percent, which were positive to our raw materials and intermediate products sent there.

Taking into account Thai export data over 5M17, positive price effects on our shipments are gradually subsiding and are expected to drop further in 2H17, in sync with global oil prices that will likely be lower than during 1H17. Nevertheless, a consistent global recovery would be an important enabler toward Thailand's export potential over the remainder of 2017. If so, Thai export growth could reach 2.0 percent YoY, which would be better than our previous estimate.