Thai exports grew by 7% year-on-year in August 2024

In August 2024, the monthly export value of Thai goods reached $26,182.3 million, reflecting a robust year-over-year growth of 7%. This performance surpassed analysts’ expectations, with SCB EIC estimating a growth of 5.9% and the Reuters Poll predicting a median forecast of 5.8%. This growth follows a remarkable 15.2% year-over-year increase recorded in March. For the first eight months of this year, the total value of Thai exports amounted to $197,192.8 million.

In August 2024, the monthly export value of Thai goods continues to grow robustly, increasing by 7% year-over-year.

The export expansion this month was supported by

(1) the export value of computers and components expanded by 74.7% from 82.6% in the previous month due to the recovery in demand in the global market following the upward cycle of electronic goods; This factor is a proportion (Contribution to growth) to help the export value in the month

(2) The value of rubber and rice exports continued to expand well at 64.6% and 46.7%, respectively. In addition, rice importers have increased demand for imports. As a result, the volume and price of rice exports have increased. In terms of export value, rubber exports expanded due to higher prices due to increased consumer demand. At the same time, rubber production in Thailand and Indonesia has decreased, both of which are the world’s main rubber exporters. contributed to the export value in the month of and

(3) gold exports expanded by 99% contributed to the export value in August.

In the preliminary analysis, it was found that when categorizing export goods, exports of agricultural products grew significantly by 17.5%, particularly in rice and rubber. Exports of agro-industrial products also saw a notable increase of 17.1%, driven mainly by fats and oils from both plant and animal sources. Meanwhile, exports of industrial goods, which include mineral products and fuels, rose by 5.2%, with strong contributions from computers and equipment, gold, machinery, and mechanical components.

Additionally, rubber products and gold jewelry experienced substantial growth.
For major market exports, the Swiss market was able to expand by 175.1% (SCB EIC initially estimates that the expansion is good due to gold exports, which have increased significantly in recent months). The Middle East market is 34.6% and the EU 26.4%, followed by South Asia, Africa, Latin America, CLMV, Russia and the CIS group, China, and ASEAN 5, respectively.

Thailand’s trade balance expanded beyond analysts’ expectations due to better-than-expected exports and slower-than-expected import growth.

The value of merchandise imports in August was 25,917.4 million US dollars, expanding by 8.9% (SCB EIC estimated 10.5% while Reuter Poll had a median forecast of 7.3%). Imports of raw materials and semi-finished goods, fuels, and capital goods expanded well by 16.2%, 13.4%, and 7.2%, respectively. Imports of vehicles and transportation equipment contracted less severely at -23.8% from -45.1% in the previous month. However, imports of consumer goods reversed to contract by -0.8% (Figure 2), resulting in a surplus of US$264.9 million in the customs system this month, contrary to analysts’ estimates of a deficit (SCB EIC estimated -380 million US dollars while Reuter Poll had a median forecast of -70 million US dollars). This was due to a higher-than-expected expansion in export values while import values expanded less than expected. For the overall picture of the first 8 months of 2024, Thailand’s trade balance still had a deficit of -6,351 million US dollars.

SCB EIC predicts continued growth in export trends for the remainder of the year

SCB EIC estimates that the value of Thai exports will expand by 2.6% in 2024 (as of September, the balance of payments system figures). However, the export value in July and August has continued to expand well and is higher than SCB EIC’s forecast and much higher than the market’s view. ² In addition, Thai exports are still likely to expand in the next phase from the global economy that is still expanding overall, although it has slowed down in many countries, including the electronics cycle and the pressure on shipping rates that are starting to decrease. As a result, the export value in 2024 may expand more than the previous estimate of 2.6%, but we must keep an eye on the additional impacts from flooding in many areas of Thailand, the appreciation of the baht, and the cancellation of rice export control measures in India.

In the short term, export value may increase more than anticipated; however, next year, growth is expected to be less pronounced.

The growth rate of Thai export value at 2.6% and 2.8% in 2024 and 2025 is still not high compared to the average during 2010-2019 of 5.3% (Figure 4, left), reflecting the ongoing challenge in restoring the driving force of Thai exports from Thailand’s declining competitiveness and relatively backward structural problems. When considering the details of 13 major Thai export products, accounting for 76% of total exports, only 2 products (electronics and machinery and fruits) grew higher than the world average during 2019-2023, while the remaining 11 products grew slower than the world average (Figure 4, right). In addition, external problems will pressure Thai exports from (1) geopolitical problems from the ongoing war, intensifying economic polarization or increasing trade protectionist measures; (2) the problem of China’s overcapacity that may worsen Thailand’s competitiveness problems, reducing its ability to compete in terms of price with Chinese products; and (3) freight rates (shipping costs) that may rise again. Due to more frequent and severe wars, shortages of shipping ships and containers, and (4) the uncertainty surrounding the US election results, there is still a possibility of additional tariffs on all types of imports from all countries.