May Exports Fell Further – 3rd Annual Contraction Likely (Economic Brief No.3564 Full Ed.)

Thai trade data for May failed to signal a rebound with exports continuing to underperform, down 5.01 percent YoY, while imports tumbled 19.97 percent YoY. Such an unpromising situation illustrates a bumpy road to recovery ahead, and thus economic momentum remaining weak.

As for 2H15, KResearch's preliminary assessment points towards a better outlook for imports over 1H15, thanks to a low 2H14 base, which may allow imports to register a gain this year. Despite that, the average export growth rate will likely be moderate, due to bleak prospects in many global economies, including those of major trade partners, thus being unfavorable to our own recovery and will limit growth. Our hindered export structures will also need more time to adjust towards more responsiveness to global demand that will help bolster our competitiveness. There are also other negative factors that have hurt our exports to European markets, including weak competitiveness versus rival exporters after Thailand lost EU GSP tariff preferences, not to mention the degraded image of our fishery products after the EU issued a warning to Thailand on illegal, unreported and unregulated (IUU) fishing.