Thai exports drop less than expected in May, seen improving in H2

THAILAND’S exports contracted less than expected in May, as higher industrial goods shipments and a weakening baht helped offset some of the impact of sluggish global demand, the Ministry of Commerce said on Tuesday (Jun 27).

Customs-based exports, a key driver of Thai growth, declined 4.6 per cent in May from a year earlier, beating a forecast for an 8 per cent year-on-year drop in a Reuters poll. Exports, meanwhile, jumped 12 per cent from April.

“A positive factor for overall exports was the weakening baht,” Keerati Rushchano, the ministry’s permanent secretary, said in a press briefing. The Thai currency has depreciated 1.8 per cent against the US dollar so far this year.

The global economic outlook should also improve, which will be positive for exports from now until the end of the year, Keerati said. The ministry maintains its target of 1 per cent to 2 per cent annual export growth for 2023, he added.

While global economic uncertainty has weighed on demand, the global manufacturing sector has shown signs of recovery from production-chain disruptions, the ministry said in a statement.

Exports of industrial goods rose 1.5 per cent in May from a year earlier, picking up for the first time in eight months. This was helped by higher shipments of automobiles and semiconductors.

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Shipments of agricultural goods, however, fell 27 per cent in May from a year ago, with rubber down 37 per cent year on year. But rice exports jumped 85 per cent from May 2022.

Exports to the US rose 4.2 per cent year on year last month, while shipments to Japan fell 1.8 per cent. Exports to China slumped 24 per cent year on year due to the country’s uncertain economic recovery.

Thailand posted a trade deficit of US$1.8 billion in May versus a forecast deficit of US$300 million, with imports showing a 3.4 per cent year-on-year drop.

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Thai exports fall more than expected in April, may rebound in Q3

For the January-to-May period, exports declined 5.1 per cent from a year earlier, imports were down 2.5 per cent and the trade deficit stood at US$6.4 billion.