26-7-2023 (BANGKOK) Thailand’s exports faced a challenging ninth consecutive month of contraction in June, although the decline was less severe than anticipated. The commerce ministry revealed on Wednesday that customs-based exports, a crucial pillar of the nation’s economy, dropped by 6.4 per cent compared to the same month the previous year. This figure surpassed analysts’ expectations, who had predicted an average decline of 7.3 per cent in a Reuters poll. On a positive note, exports did see a 2 per cent increase from May.
The sluggish global demand has been a significant factor affecting Thailand’s export performance. The commerce ministry attributed this decline to the economic situation in trading partner countries, which remained subdued due to high inflation rates and elevated interest rates. These factors led to restrained production and consumption.
Despite the challenging environment, the ministry remains optimistic and expects some growth for the full year. Keerati Rushchano, the ministry’s permanent secretary, mentioned that Thailand’s export decline has been milder compared to other exporting nations. The ministry is targeting annual export growth of 1 per cent for 2023, though it had previously aimed for a 1 per cent to 2 per cent rise.
Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council, added that exports could show some improvement from July as certain sectors continue to perform well. Notably, car and parts exports rose by 7.2 per cent in June year-on-year, and circuit board shipments increased by 5.3 per cent. However, exports of computers, rubber, and oil experienced declines during the same period.
Rice exports faced a significant setback, with volumes dropping by 25.4 per cent year-on-year in June. Exports to the United States declined by 4.8 per cent, while shipments to Southeast Asian countries slumped by 20 per cent. In contrast, exports to Japan rose by 2.6 per cent, and shipments to China increased by 4.5 per cent.
Thailand managed to post a trade surplus of $58 million in June, defying forecasts that projected a deficit of $900 million. Import figures also declined by 10.3 per cent year-on-year.
Overall, the first half of 2023 saw exports contract by 5.4 per cent compared to the previous year, with imports falling by 3.5 per cent, leading to a trade deficit of $6.3 billion.
