Thailand: Merchandise exports increase in June
Merchandise exports jumped 43.8% in annual terms in June, on the heels of May’s 41.6% upturn. June’s result marked the strongest outturn since June 2010 and was in part driven by a low base effect. Meanwhile, merchandise imports soared 53.8% in annual terms in June (May: +63.5% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a USD 0.9 billion surplus in June (May 2021: USD 0.8 billion surplus; June 2020: USD 1.7 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 16.3 billion surplus in June, compared to the USD 17.1 billion surplus in May.
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–July, 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 the current-account surplus to remain stable in 2021 relative to 2020, at 3.7% of GDP. The relatively modest widening will stem mainly from the continued weakness of the tourism sector, as travel restrictions will remain in place. However, 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. This rise in goods exports will be the main factor widening the overall current-account balance.”