Thai export growth target maintained despite 7-month shipment decline

Despite a decline in Thai exports for seven consecutive months, the Commerce Ministry maintains its export growth target of 1-2% for the year. Keerati Rushchano, the Permanent Commerce Secretary, predicts that the export outlook will remain negative due to the high inventory held by trading partners, causing delays in orders. However, he expects exports to improve in the second half of the year. Keerati said…

“The ministry believes the global economy is facing a persistent slowdown. Although inflation rates have eased, they remain relatively high, prompting many countries to adopt stringent monetary policies.”

Keerati also mentioned uncertainties from the financial crisis affecting commercial banks in the US and Europe, as well as the US debt ceiling problem.

On a positive note, Keerati highlighted China’s recent recovery and its impact on Thai exports. Unpredictable weather conditions and drought have also led several nations to prioritise food security, creating a favourable environment for Thailand’s agricultural exports this year.

According to the ministry, the customs-cleared value of exports fell by 7.6% year-on-year to US$21.7 billion in April, while imports decreased by 7.3% to US$23.2 billion, resulting in a trade deficit of US$1.47 billion. In the first four months of 2023, Thai exports decreased by 5.2% year-on-year to US$92 billion, while imports fell by 2.2% to US$96.5 billion, resulting in a trade deficit of US$4.51 billion.

Chaichan Chareonsuk, Chairman of the Thai National Shippers’ Council, noted that Thailand’s 5.2% contraction in shipments outperformed many ASEAN peers such as Vietnam and Indonesia, which both experienced double-digit declines. He credited the growth to agricultural and food products, with durian exports growing by 102% year-on-year in April and rice and other food items posting healthy export totals.

Chaichan expressed concerns about the lagging industrial goods shipments, specifically hard disk drives and electronic components, as exports to the US decreased. He also mentioned concerns about plastic pellets, chemicals, and textiles, which have declined for several months due to the contraction of the US market.

However, the improvements in China’s economy have positively affected Thai and ASEAN shipments, as they make up a significant part of China’s supply chain. Additionally, Vietnam’s textile industry is performing well. Chaichan believes that a weakening baht should facilitate exports, but data for May and June must be monitored closely, reported Bangkok Post.

He concluded by stating that the export situation is expected to improve in the latter half of the year.