Thailand: Merchandise exports grow at a more moderate pace in July
August 25, 2021
Merchandise exports rose 20.3% in annual terms in July, following June’s 43.8% jump. July’s result marked the fourth month of double-digit growth and was in part driven by a low base effect. Meanwhile, merchandise imports soared 45.9% over the same month last year in July (June: +53.8% yoy).
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 0.2 billion surplus in July (June 2021: USD 0.9 billion surplus; July 2020: USD 3.4 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 13.1 billion surplus in July, compared to the USD 16.3 billion surplus in June.
Looking ahead, as the worldwide recovery from the Covid-19 pandemic continues and vaccination rates accelerate, exports are set to gain momentum on the back of improved foreign demand. That said, the surge in Covid-19 cases through April–September, a relatively slow vaccine rollout and political challenges at home all pose risks to the outlook.
Regarding the external sector, analysts at the EIU commented:
“We forecast that the current-account surplus will narrow in 2021 relative to 2020, to about 3.0% of GDP. This relatively small surplus will stem mainly from the continued weakness of the tourism sector amid ongoing restrictions, as well as a surge of imports bills attributed partly to the rising energy prices. Nevertheless, outbound shipments of merchandise goods will post a healthy recovery, with many of Thailand's major trading partners (such as the US) emerging from the coronavirus shock.”
Author: Stephen Vogado, Economist