Thailand: Merchandise exports grow for first time in nine months in December
January 22, 2021
Merchandise exports inched up 4.7% on an annual basis in December, sharply contrasting November’s 3.6% drop. December’s increase marked the first expansion in nine months and the fastest expansion since February 2019. Meanwhile, merchandise imports increased 3.6% in annual terms in December (November: -1.0% yoy), marking the best result since March 2020.
As a result, the merchandise trade balance improved from the previous month, recording a USD 1.0 billion surplus in December (November 2020: USD 0.1 billion surplus; December 2019: USD 0.7 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 24.5 billion surplus in December, compared to the USD 24.2 billion surplus in November.
The projected easing of the coronavirus pandemic this year should lead to a rebound in global economic growth. For Thailand, activity is set to recover robustly, 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 the outlook for the external sector, Sian Fenner, lead Asia economist at Oxford Economics, commented:
“We expect trade to be bumpy in the short term given uneven global demand, but we still look for exports to trend higher [this] year as global restrictions are eased. While positive news on vaccines provides some upside risk, uncertainties remain about vaccine distribution, and travel restrictions will likely stay for a while. This means service exports will remain a drag on the forecast recovery.”
Author: Stephen Vogado, Economist