Thailand posts biggest trade deficit since 2023 as imports surge

[BANGKOK] Thailand posted its widest trade deficit since early 2023, with a surge in imports of capital goods and raw materials from China, even as exports lost momentum after US buyers frontloaded purchases to beat higher tariffs.

Inbound shipments jumped 16.3 per cent in October, beating even the most optimistic forecast in a Bloomberg survey of economists, while exports grew just 5.7 per cent, missing estimates. As a result, the country’s trade balance swung to a US$3.4 billion deficit, from US$1.3 billion surplus a month earlier, the Commerce Ministry data showed on Tuesday (Nov 25).

The wider deficit underscores imbalances in Thailand’s trade-driven economy. A sustained shortfall could weigh on overall growth, pressure the baht and complicate monetary policy at a time when the central bank, as well as Prime Minister Anutin Charnvirakul, are trying to support a fragile economic recovery.

Exports are a key driver of the Thai economy, accounting for more than half of gross domestic product. The country’s heavy reliance on international trade makes it vulnerable to currency fluctuations and global tariff policies that can erode competitiveness. Thai shipments to the US, the country’s largest export market, face tariffs of up to 19 per cent, weighing further on demand.

The baht has gained more than 5 per cent against the greenback so far this year, outpacing most other Asian currencies and making Thai products more expensive. The baht held gains of 0.4 per cent against the dollar after the release of trade data.

The wider-than-expected trade deficit “may be positive as it should help ease pressure on Thailand’s current account surplus and the baht strength”, Nantapong Chiralerspong, director-general of the Trade Policy and Strategy Office, told reporters.

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Exports to the US rose 32.9 per cent from a year ago, the 25th straight month of growth, driven by computers and parts, machinery and steel. Shipments to China grew 9.3 per cent last month, according to the Commerce Ministry. BLOOMBERG