Thai exports contracted for the fourth consecutive month in July, by 4.4% year-on-year, bringing down shipment growth in the first seven months of the year to minus 2%, according to Commerce Ministry.
Deputy Commerce Minister Suvit Maesincee said exports totalled US$17.41 billion during the month while imports also fell 7.2% to $16.2 billion year-on-year, representing a trade surplus of $1.2 billion.
Excluding commodities including oil and gold, exports dropped 6% year-on-year in July, while the figure over seven months fell by 2.7% from the same period of 2015.
He said the major factors for the July decline were slumping shipments of refined oil (-40.7%) and automobiles (-27.5%), which brought down industrial exports by 0.4%.
Farm exports also tumbled by 18.6% in July, led by rubber (-34.8%), tapioca (-28.4%) and sugar (-33.8%).
In any case, the ministry believes exports would improve over the next three to six months as confidence picked up after the smooth charter referendum on Aug 7.
Mr Suvit said the Thai exports might also be bolstered by improving commodity prices and global economic circumstances.
The ministry foresaw an additional $95-billion shipments over the remaining five months of the year, bringing 2016 growth to 1.3% from 2015.
The ministry will revise its economic projections in September.
Little sign of regional recovery
Bloomberg reported on Friday signs of life returning to Asian trade have stirred up some optimism of a recovery, but a closer look at the data coming out of the region indicates the malaise is far from over.
While export figures from Malaysia and Thailand showed surprising strength in June, trade continues to contract across most of Asia in the face of sluggish global growth, lower commodity prices and weaker demand from China.
“There is hardly any room for cheer,” Taimur Baig, a Singapore-based Deutsche Bank AG economist, said by e-mail. “Substantial recoveries in price and demand, both for commodities and electronics/machinery, are necessary for regional exports to return to trend levels, an outcome that is very unlikely.”
Malaysian exports rose 3.4% in June from a year earlier, while merchandise shipments from Thailand gained 1.9%. That’s in contrast to elsewhere in the region, where exports are still posting declines of more than 10%.
Singapore’s non-oil exports -- the most commonly used gauge for trade performance -- dropped 10.6% in July from a year earlier. Japan said last week shipments fell 14% in the period, the biggest drop since 2009, while in the Philippines, exports declined 11.4% in June.
According to Deutsche Bank’s calculations, Malaysian and Indonesian merchandise exports in the first half of this year were down more than 20% compared with two years ago. China and Thailand, with declines of more than 5%, were the best performers under this metric, while exports in Singapore and Japan were about 10% lower.
China, like every other major economy in Asia aside from Japan and Vietnam, posted a double-digit export contraction last year, according to estimates from Australia & New Zealand Banking Group.
“After what can only be characterised as a dreadful performance over 2015, the cumulative trade performance for 2016, based on year-to-date exports, looks like it could be even worse,” Weiwen Ng, an economist at ANZ in Singapore, said.
The UK’s decision to leave the European Union and a global rise in protectionism doesn’t bode well for the trade outlook, while in Japan, a stronger yen is wreaking havoc on the economy. Credit Suisse said in a report on Friday that global growth will remain lackluster next year at 2.6% compared with an estimated 2.4% in 2016.
“Without a rebound in private capital expenditure across the world, of which there is little sign as of now, and with Brexit ripples yet to fully unfold, any bounce from trade will likely prove short-lived,” Frederic Neumann, a Hong Kong-based economist with HSBC Holdings Plc, said in a report. “That’s especially problematic for Asia: with local demand growing tired, stronger exports are urgently needed.”