A beach town in Thailand

Thailand Trade Balance July 2020

Thailand: Merchandise exports contract at softer rate in July

Merchandise exports fell 11.4% over the same month last year in July, softening from June’s 23.2% dive. The improvement was primarily driven by milder declines in vehicles and jewelry exports. Meanwhile, merchandise imports dived 26.4% over the same month last year in July (June: -18.0% yoy), as a high base effect weighed on the year-on-year outturn.

As a result, merchandise trade balance improved, recording a USD 3.3 billion surplus in July (June: USD 1.6 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 19.4 billion surplus in July, compared to USD 16.2 billion surplus in June.

The prolonged nature of the pandemic will weigh heavily on the overall economy this year, as weak external demand weighs on exports, and diminished domestic activity and supply-chain disruptions impair imports. A weakening of the Chinese economy and uncertainty regarding future demand for Thai products both tilt risks to the downside.

On July’s results, Charnon Boonnuch and Euben Paracuelles, economists at Nomura, noted:

“Importantly, officials today also reported no tourist arrivals in July, unchanged from Q2, despite some relaxation of border restrictions. This is consistent with our view that tourism revenue, which has been the major driver of the current account surplus in the past few years, should stay close to zero in H2.”

Regarding this month’s reading, Prakash Sakpal, senior economist at ING, commented on the potential knock-on effects for the Thai baht:

“While a rising trade surplus is no relief to authorities worried about the strong currency potentially threatening the recovery in exports and tourism, they should take comfort in a narrowing current account surplus, which should act as a headwind to currency appreciation this year.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest