Thailand: Export growth hits a multi-year high in November
December 29, 2017
Thailand’s external sector recorded a USD 1.8 billion surplus in November, coming in slightly above the USD 1.6 billion surplus registered in the same month a year ago and significantly higher than the USD 0.2 billion surplus in October. The 12-month sum of the trade balance inched up in November to a USD 15.2 billion surplus, a nod above the result in the prior month (October: USD +15.1 billion).
Exports grew 13.3% on an annual basis in November, which was slightly above the previous month’s 13.1% year-on-year expansion and significantly above market expectations. The result was the best reading since January 2013. In November, export growth was sufficiently broad-based, as all but three subcategories recorded higher export values than in the same month last year. The greatest increase in the value of exports was in machinery exports, followed by food exports as a distant second. Exports of crude materials also clocked a noteworthy increase. Moreover, export growth was particularly strong to other ASEAN countries and China. The pace of growth in imports outpaced exports again; imports grew 13.7% year-on-year in November and came in slightly above the 13.5% expansion in October. Growth in the import values of machinery and mineral fuel and lubricant products was particularly noteworthy.
Worries over the strength of the baht continue to weigh on exporters, while the Central Bank has said that the currency gains would not hurt export growth but affect profits. The baht traded at 32.6 against the U.S. dollar on 29 December. However, the strong external sector has not yet translated into solid domestic economic activity; GDP growth in Thailand is lagging behind
regional neighbors. The elections scheduled for November 2018 are likely to be the major local risk to the economy; external risks stemming from the U.S. and China, however, are expected to be a greater threat to the Thai economy.
Author: Jan Lammersen, Economist