Thailand: Merchandise exports contract at a sharper rate in October
November 22, 2020
Merchandise exports dived 6.7% year-on-year in October (September: -3.9% year-on-year). Meanwhile, merchandise imports dived 14.3% over the same month last year in October (September: -9.1% yoy).
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 2.0 billion surplus in October (September 2020: USD 2.2 billion surplus; October 2019: USD 0.5 billion surplus). However, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 24.0 billion surplus in October, compared to the USD 22.5 billion surplus in September.
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 well, with exports likely to be boosted by improving external demand, and returning household spending driving an uptick in imports. However, the future trajectory of the pandemic, and especially its impact on all-important tourism levels, is a key factor determining the outlook.
Regarding exports, Sian Fenner, Lead Asia economist at Oxford Economics, commented:
“We expect goods exports to continue to recover over coming months, but the pace of recovery is likely to be bumpy given uneven global demand. In addition, despite the introduction of special tourism visas, ongoing travel restrictions will mean services exports will remain a drag on the forecast recovery.”
Author: Stephen Vogado, Economist