Connect with us

Economics

Thai exports fell by -5.8%YOY in May 2019

Reported negative growth in May represented a seven-consecutive month decline, with growth plummeting to a 34-months lowest rate.

Avatar

Published

on

The value of Thai exports fell by -5.8%YOY in May 2019, after a -2.6%YOY contraction in the previous month. Reported negative growth in May represented a seven-consecutive month decline, with growth plummeting to a 34-months lowest rate.

With this regard, overall export figures during the first 5 months of 2019, on average weakened by -4.5%YOY (excluding military arms and weapons shipment to the US in February).

  • Exports of key products. Thai products that were part of China’s supply chain took a heavy toll from USA’s import tariff increment, particularly computer – parts, and components (-1.8%YOY), rubber (-9.9%YOY), electronic integrated circuits (-16.4%YOY), and chemicals and plastics (-16.5%YOY). Meanwhile, exports of other product categories fell as well, for example, motor vehicles – parts and components (-17.2%YOY), rice (-13.3%YOY), and sugar (-14.4%YOY). While, if excluding gold, overall export growth in May would drop by -4.8%YOY.
  • Exports by key markets. Exports to various key trading partners registered negative growth such as China, Japan, Hong Kong, ASEAN-5, and EU15 with -7.2%YOY, -4.4%YOY, -3.2%YOY, -14.3%YOY, and -8.6%YOY contraction, respectively. On the other hand, exports to the US, India, and Vietnam helped cushion the impact of negative growth with an expansion of 7.8%YOY, 4.4%YOY, and 0.8%YOY, respectively.

Value of imports marginally shrank by -0.6%YOY. Growth in nearly all product categories weakened, for example, imports of capital goods, raw materials and intermediate products, and consumer goods dropped by -6.1%YOY, -5.0%YOY, and -2.2%YOY, respectively. On the other hand, imports of fuel lubricants grew by 22.8%YOY.

Trade war escalation stoked fear among businesses.

Amid temporary trade truce during December 2018 to April 2019, various investors and institutions thought that the end to the US-China trade war was near. However, in early May 2019, the US deemed the US-China negotiations unacceptable and on May 10, 2019, decided to dramatically escalate tariff to 25% from 10% on USD 200 billion worth of Chinese imports.

The move renewed market fear, as reflected from indices such as the US Trade Policy Uncertainty Index  that tracked trade policy confidence, which surged to 234.7 in May from 128.9 in April. Furthermore, Thomson Reuters/INSEAD Asian Business Sentiment Index conducted during May 31 to June 14 , revealed that Asian business confidence during quarter 2 of 2019 dropped to 53 points, a 10-years low rate and the lowest rate since the 2008 financial crisis (Figure 1).

As such, weakened business confidence and heightened trade policy uncertainty should continue to slow global trade and investment, going forward.

In 2019, Thai export growth could fall below the previously anticipated rate of 0.6%

Thailand and key regional exporters continued to face slow export growth in May, with no signs of recovery present. Furthermore, uncertainties and fears regarding the reemergence of trade war tensions additionally hamper the situation.

As a result, global trade and investment could fall below the expected levels. With heightened trade war tensions, Thailand’s export sector will receive both direct and indirect impact. In terms of direct impact, Thai exports to China will drop, especially of products in China’s supply chain targeted for export to the US. Meanwhile, the indirect impact will be from other countries’ dependency on China. As China’s economy slows, economies of countries that depend on China also slow, hence a decline in exports to these markets.

According to analysis from EIC, Thai exports to countries with higher dependency on China slowed significantly relative to markets with lower dependency on China (Figure 2). With such regards, export value growth in 2019 could be below the forecasted 0.6% growth, with the probability of negative growth. Currently, EIC is conducting a thorough analysis and will officially release revised figures during early July 2019.

Important events to consider. The first is to monitor US-China trade war tensions that could be further elevated. In early July, the US…

Source link

Continue Reading
Advertisement
Comments

Economics

Productivity is Key to Thailand’s Growth and Prosperity, says World Bank

The Thai economy is projected to pick up moderately to 2.7 percent in 2020 as private consumption recovers and investment picks up due to the implementation of large public infrastructure projects.

World Bank

Published

on

Thailand’s growth slowed to an estimated 2.5 percent in 2019 from 4.1 percent in 2018, due to external and domestic factors.

(more…)

Continue Reading

Economics

Thailand plans One trillion baht state budget to stimulate economy

Deputy Prime Minister, Dr. Somkid Jatusripitak, said that about 1 trillion baht of the government’s budget will be spent to stimulate the Thai economy.

Boris Sullivan

Published

on

Thai premier holds meeting on 2020 Budget

BANGKOK (NNT) – The ongoing trade war between the United States and China and a delay in state spending have added uncertainty to the country’s economic outlook.

(more…)

Continue Reading

Economics

Investment promotion requests exceeded 750bn baht in 2019

An impressive 59% was in the Eastern Economic Corridor, with China outreaching Japan to become the biggest international investor in Thailand.

National News Bureau of Thailand

Published

on

Bangsue railway station

BANGKOK (NNT) – Thailand remained an investment destination for international investors last year, as reflected in the overall value of investment promotion requests in 2019, released by the Board of Investment (BOI) today, which exceed a 750 billion baht goal.

(more…)

Continue Reading

Most Read

Upcoming Events

Thu 23

12th World Congress on Alzheimers Disease & Dementia

January 23 @ 9:00 am - January 24 @ 5:00 pm BMT
Feb 12

Future Energy Asia

February 12 - February 14
BITEC
Bangkok
Feb 19

13th World Congress on Nursing and Health Care

February 19 @ 9:00 am - February 20 @ 5:00 pm BMT
Phuket
Phuket city
Mar 11

Food science conferences

March 11 @ 8:00 am - March 12 @ 5:00 pm BMT
Mar 11

Food science conferences

March 11 @ 9:00 am - March 12 @ 5:00 pm BMT

Press Release

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 12,058 other subscribers

Trending