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Slowing global economy pressures Thai exports

The resurgence of rising trade dispute between the US and China has heightened the tensions in the global trade atmosphere and added risks to Thai export sector in the remainder of 2019.

Kasikorn Research Center

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Thai exports in February were valued at US$19.03 billion, a growth of 0.91 per cent compared to the same period last year.

 Slowing global economy pressures Thai exports in April 2019 to contract for a second consecutive month.

The outbound shipment of Thai goods in April 2019 totaled USD18,555.6 million, declining 2.57 percent YoY.  Consequently, Thai exports in the first four months of 2019 dropped 1.86 percent YoY, a further decline from the first quarter.

The contraction is attributed to slowing economic growth of key trading partners especially China and the European Union.

High base effect, due to front loading of electronic products and a sharp increase in prices of rice and tapioca in the world market in April 2018 have contributed to the lackluster export performance.

Thai exports will continue to face several challenges in 2019

Thai exports in the remaining eight months of 2019 continue to face several challenges, namely, lower-than-expected global economic growth,  fluctuations in the world’s oil prices, cyclical downtrend of electronic goods, the possibility of Thailand’s inclusion in the US’ monitoring list of currency manipulation.

Additionally, the resurgence of rising trade dispute between the US and China has heightened the tensions in the global trade atmosphere and added risks to Thai export sector in the remainder of 2019.

Due to abovementioned factors, it will be a challenging task to maintain 2019 Thai export growth at 3.2 percent because the total value of Thai outbound shipments in the remaining eight months must reach USD22,500 million per month, which is higher an average monthly export value in the first four months of this year of USD20,136 million. 

KResearch therefore is revising our export forecasts in 2019. Based on our preliminary estimates, the export growth for the whole 2019 will slip below our initial projections of 2.5-3.5 percent.

Slowing global economy…. pressures Thai exports in April 2019 to contract 2.6%, while export growth in 2019 may drop below KR original forecast of 2.5-3.5% (Business Brief No.3802) – KASIKORN RESEARCH CENTER

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Economics

Thai Exports fell for fifth straight month, down 2.65% in 2019

Thia Exports fell for the fifth straight month in December, resulting in a full-year contraction of 2.65% in 2019

Boris Sullivan

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The Commerce Ministry reported on Wednesday that customs-cleared exports fetched $19.15 billion in December, down by 1.28% 

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Trade

Trade in Asia-Pacific declines for the first time since 2009

For the first time since the 2009 global economic crisis, the value and volume of trade in the region is declining. But the region is expected to bounce back in 2020 with positive trade growth.

Boris Sullivan

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Bangkok (ESCAP news) – Asia-Pacific economies may see positive trade growth in 2020 but are still facing downside risks from the adverse impacts of the United States – China trade tensions, two new trade briefs by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) released today have revealed.

Trade in the Asia-Pacific region contracted during 2019

For the first time since the 2009 global economic crisis, the value and volume of trade in the region is declining. Total export volume fell by 2.5 per cent, while import volume decreased by 3.5 per cent.

Oil exporting economies such as Islamic Republic of Iran and Indonesia, as well as Japan, Singapore and Hong Kong, China registered some of the largest declines in export volume.

Merchandise trade in the region also faced strong headwinds in 2018-2019 caused by the worldwide economic growth slowdown and heightened trade tensions.

These have had an adverse effect on trade, particularly in the case of economies closely integrated with China through Global Value Chains (GVCs). Integration of smaller traders into the global and regional economy through GVCs is becoming more difficult. New import barriers increase the cost of production and reduce the competitiveness of companies participating in regional production networks.

Tariff war-related toll could reach $117 billion in the Asia-Pacific region

ESCAP earlier estimated the tariff war-related toll on gross domestic product (GDP) could reach as much as $400 billion worldwide and $117 billion in the Asia-Pacific region. These projections are materializing and could increase unless current efforts to reduce trade tensions are successful.

“For the Asia-Pacific region, the challenge is to increase trade and deepen economic integration to support sustainable development. Looking ahead to 2020, the agreement reached between China and the United States is welcome and should reduce policy uncertainty,”

United Nations Under-Secretary-General and Executive Secretary of ESCAP Armida Salsiah Alisjahbana.

She further underscored the importance of the multilateral trading system to underpin future trade growth.

The new guarantees provided by the implementation of the Phase-I deal reached between China and the United States might boost investor and consumer confidence enough for trade in the region to grow by about 1.5 per cent in 2020.

This growth would be felt more in developing economies, which could see a 1.9 per cent and 2.7 per cent growth in exports and imports respectively in 2020. However, country-level forecasts vary widely and uncertainties are high.

In trade in commercial services, the region again outperformed the rest of the world in 2019.

Relatively slower growth is expected in 2020, with transport services, other business services and goods-related services expected to be the most affected sectors.

The mid to long-term prospects for trade in services – in particular ICT and business services – remain bright, supported by technological advances.

Commercial services trade in Asia and the Pacific continue to be dominated by a relatively small number of economies, namely China, Japan, India, Singapore, Republic of Korea and Hong Kong, China – accounting for over 70 per cent of total commercial services trade in the region.

Increasing business opportunities associated with digital technologies may lead to a further concentration of trade opportunities in those economies.

The ESCAP trade briefs serve as a complement to the Asia-Pacific Trade and Investment Report 2019. They provide in-depth analysis of performance and trends in 2018-2019, and the outlook for 2020 at regional and country levels, with a special emphasis on the impact of escalating trade tensions within and outside the region.

Read the Asia-Pacific Trade in Goods Trends and Outlooks: https://www.unescap.org/resources/trade-goods-outlook-asia-and-pacific-20192020

Read the Asia-Pacific Trade in Services Trends and Outlooks: https://www.unescap.org/resources/trade-commercial-services-outlook-asia-and-pacific-20192020

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Trade

Thailand, the world’s 6th biggest exporter of fruits

Export value of fruit in the first 10 months of this year reached three billion U.S. dollars, making Thailand the 6th largest fruit exporter in the world.

National News Bureau of Thailand

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BANGKOK(NNT) – Known for its good taste and quality, Thai fruits have gained much popularity in foreign countries.

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