Thailand: Merchandise exports swing into contraction in February
Merchandise exports declined 2.6% over the same month last year in February, contrasting January’s 0.4% year-on-year increase. Meanwhile, merchandise imports soared 22.0% on an annual basis in February (January: -5.2% yoy).
As a result, the merchandise trade balance was flat in February, up slightly from January’s USD 0.2 billion deficit (February 2020: USD 4.2 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 21.5 billion surplus in February, compared to the USD 25.6 billion surplus in January.
Looking ahead, as the worldwide recovery from the Covid-19 pandemic continues and vaccination rates gain momentum, exports are set to pick up on the back of improved foreign demand. That said, the uncertain development of the pandemic, coupled with political challenges at home, pose a risk to 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 H1 as a global chip shortage weighs on motor vehicle production, but we still look for exports to trend higher this year as the recovery in global trade broadens.”