Thailand’s overall exports growth accelerated to 7.5% YoY in August 2022 (excluding gold, oil and weaponry shipments, the exports grew by 10.1% YoY), resulting in an 11.0% YoY expansion of Thai exports in the first 8 months of the year.
Factors affecting exports in August 2022
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Exports to the U.S. and Europe continued to expand by double digits in August, especially for computers and components, reflecting the continued demand for electronic products, but tending to slow down with the economic slowdown in each country.
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Exports of passenger cars expanded considerably well in August because of the low base in the previous year. Exports to Middle East countries like Saudi Arabia and the United Arab Emirates have increased due to improved trade relations.
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Exports to South Asian countries, which are the second most important markets and account for 4% of total exports, slowed down, especially Bangladesh and Pakistan. They contracted sharply due to weak domestic demand amid the rising cost of living and natural disasters.
China’s Zero-COVID Policy continues to weigh on Thai exports to China, reflected in a third consecutive monthly contraction in August 2022
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Exports to China continued to contract sharply by 20.1% YoY in August, representing the third consecutive month of contraction and resulting in a nearly 5% contraction for Thai exports to China in the first 8 months. This is because China keeps implementing the Zero-COVID Policy and announces lockdown measures in some key cities, especially in China’s southern economic cities like Shenzhen and Sanya, resulting in constraints on China’s consumption and manufacturing as well as weak domestic demand in China. Therefore, China’s Zero-COVID Policy will remain an important factor for Thai exports to China, going forward.
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Exports of agricultural and industrial products to China contracted 41.8% YoY and 9.2% YoY in August respectively, while the exports of agro-industrial products expanded well by 38.5% YoY. Agro-industrial products were among the top 10 Thai export products to China with the highest value in August, while the value of fresh and freeze fruits, chemicals and plastic pallets shrank.
KResearch maintains its projection for Thai exports in 2022 at 7.8%, based on the view that exports in the second half of 2022 will slow down from the first half of 2022.
KResearch assesses that Thai exports in the second half of 2022 will slow down from 12.7% in the first half of 2022, due to the high base in the second half of 2021, the future slowing trend in the global economy, and the ongoing Russia-Ukraine conflict. As a result, Thai exports are expected to grow at 7.8% in 2022.
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