Thailand’s export growth has slowed down substantially during 2H22 due to a number of factors. These include the high base of 2H21 and a noticeable weakness in demand seen in various export markets. As a result, Thai shipments contracted for the second consecutive month in November 2022 by 6.0 percent YoY to USD22,308.0 million, denting the 11M22 export growth to 7.6 percent YoY. November exports were adversely affected by shrinking shipments of computers and related components, para rubber, plastic pallets and chemicals. Although Thai shipments to the US and the EU have resumed a slight growth, the overall exports to those markets continue to be pressured by their sluggish demand. Thailand’s outward trade to China, Japan and ASEAN member states has reported steeper contractions, reflecting the weakness in purchasing power of those trade partners, which may in turn threaten Thai exports in subsequent years.
The value of Thai exports since 2021 has already grown to its pre-COVID-19 levels, and logged consecutive record highs with a very high base. However, since economic conditions in Thailand’s trade partners have been crippled by elevated inflation, thus pressuring their domestic spending, the outlook for Thai exports may be gloomy in 2023. We at KResearch are of the view that Thai shipments will likely shrink at 1.5 percent to roughly USD282 billion in 2023 because the value of Thai commodity exports may contract in line with declining global prices as a result of sluggish global demand. Shipments of luxury products such as jewelry and automobiles to major trade partners may grow at a slow rate. Food exports will continue to grow, but their share of Thailand’s total shipments will be relatively small. The overall Thai exports may resume growth because of increased exports of electronics and automobiles, but this will primarily depend on consumer purchasing power in trade partners and Thailand’s accelerated efforts in marketing shipments to non-traditional export markets, especially the Middle East. However, if import demand for Thai products declines faster than expected, there is a likelihood that Thai exports may remain static or grow marginally in 2023.