Connect with us
Welcome to Long An

China

Thailand’s export drops 5.8%YOY in May

Thailand’s export growth this year may be flat after Thailand’s outbound shipments in May recorded the sharpest drop in 34 months.

Avatar

Published

on

Thailand’s export growth this year may be flat after Thailand’s outbound shipments in May recorded the sharpest drop in 34 months.

After the Commerce Ministry on Friday released the figures of Thai exports in May which dropped 5.8 percent year-on-year, contracting for seven consecutive months and the sharpest drop in 34 months, economists are now revising their export projections without ruling out the possibility of export contraction this year.

Thai exports in May continued to contract by -5.8%YOY

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

Thailand’s export growth this year may be flat after Thailand’s outbound shipments in May recorded the sharpest drop in 34 months.

 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 could impose additional import tariffs on Chinese imports worth USD 300 billion, in which, China would most probably retaliate. Furthermore, the G-20 meeting that will occur in late June 2019, will mark an opportunity for the two leaders to meet, a widely anticipated event. The second event to monitor is the United States’ plan to ramp up automotive import tariffs from all countries to an anticipated 25%. Negotiations for automotive import tariffs with the European Union and Japan are currently in place with expected conclusions within November 2019.

Source link

Advertisement
Comments

China

GM sells Thai factory to Chinese automaker GWM

After 20 years of operation in Thailand, General Motors will cease its activities, and resell its factory to the Chinese manufacturer Great Wall Motors

Avatar

Published

on

General Motors (GM) announced it will stop selling Chevrolet vehicles in Thailand and sell its Rayong plant to Great Wall Motors (GWM) by the end of this year.

(more…)

Continue Reading

Banking

Governments most exposed to coronavirus have strong fiscal and external buffers

Moody’s baseline assumption is that the economic effects of the outbreak will continue for a number of weeks, after which they will tail off and normal economic activity will resume.

Boris Sullivan

Published

on

As measures to contain the coronavirus and fear of contagion hit consumption and production, downside risks to our GDP growth forecast for China (A1 stable) have increased., says Moody’s Research Announcement.

(more…)

Continue Reading

China

In China, an Unprecedented Economic Transformation

China has been undergoing an economic transformation unlike any other on the planet through an Industrial Revolution, urbanization, and an information age o experiencing all three simultaneously.

Avatar

Published

on

HONG KONG, Dec 19, 2019 – (ACN Newswire) – Lei Zhang’ 02 is investing in Chinese companies during an extraordinary moment in history, he told students at Yale SOM.

(more…)

Continue Reading

Must Read

Press Release

Subscribe via Email

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

Join 12,296 other subscribers

Upcoming Events

Mon 06

26th World Cardiology Conference – Bangkok

April 6 @ 8:00 am - April 7 @ 5:00 pm BMT
Wed 08

Global Public Health 2020

April 8 @ 8:00 am - April 9 @ 5:00 pm BMT
Mon 13
Fri 17

2nd International Conference on Nanomedicine and Nanotechnology

April 17 @ 9:00 am - April 18 @ 5:00 pm BMT
Aug 21

16th International Expo on Recycling and Waste Management

August 21 @ 8:00 am - August 22 @ 5:00 pm BMT

Trending