Thailand: Merchandise exports decrease at a more moderate rate in September
Merchandise exports edged down 3.9% annually in September (August: -7.9% year-on-year). September´s result marked the smallest fall since April 2020. Meanwhile, merchandise imports slid 9.1% over the same month last year in September (August: -19.7% yoy), marking the best result since March 2020.
As a result, the merchandise trade balance deteriorated, recording a USD 2.2 billion surplus in September (August: USD 4.3 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 22.5 billion surplus in September, compared to the USD 21.5 billion surplus in August.
The projected easing of the coronavirus pandemic in 2021 should lead to a rebound in global economic growth. For Thailand, activity is set to recover strongly, with improving external demand boosting exports and growth in domestic consumption driving higher imports. However, concerns regarding U.S.-China trade tensions and uncertainty over future demand for Thai products both tilt risks to the downside.
Regarding the outlook for the external sector, Charnon Boonnuch and Euben Paracuelles, economists at Nomura, commented:
“We maintain our 2020 current account surplus forecast of 2.8% of GDP, narrowing from 6.8%, due to the sharp drop in tourism revenue, more than offsetting surging net gold exports, before widening to 6.1% in 2021. As we have argued, the surge in net gold exports is unlikely to be sustained amid falling gold prices and a rundown in inventory likely contributing to the narrowing in the current account surplus further out. However, this is likely to be offset by still weak domestic demand, which may be further weighed on by the rising political uncertainty and implies a further pickup in import growth may be more limited ahead.”