Thailand: Merchandise exports grow at a quicker pace in May
Merchandise exports soared 41.6% over the same month last year in May, on the heels of April’s 13.1% upturn. May’s outturn marked the strongest expansion since June 2010 and was in part driven by a low base effect. Meanwhile, merchandise imports jumped 63.7% on an annual basis in May (April: +29.8% yoy), marking the best result since March 2010.
As a result, the merchandise trade balance improved from the previous month, recording a USD 0.8 billion surplus in May (April 2021: USD 0.2 billion surplus; May 2020: USD 2.7 billion surplus). Lastly, the trend deteriorated, with the 12-month trailing merchandise trade balance recording a USD 16.2 billion surplus in May, compared to the USD 18.1 billion surplus in April.
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–June, a relatively slow vaccine rollout and political challenges at home all pose risks to the outlook.
Regarding the external sector, Sian Fenner, lead Asia economist at Oxford Economics, commented:
“Amid an impressive surge in world trade, external demand remains solid with the latest manufacturing PMI signalling an increase in new export orders. That said, the current wave of Covid infections and a global chip shortage are likely to temporarily disrupt automotive and electronics exports. However, we view this as largely a result of strong demand and expect much of the lost output will be made up later in the year.”