Thailand’s exports dropped for the fourth straight month in June, attributed to weak global demand because of the world’s economic slowdown, ongoing international trade tensions between the US and China, and lower oil prices.
The Commerce Ministry said on Monday customs-cleared outbound shipments remained in the red, down by 2.15% year-on-year in June to US$21.4 billion after contracting by 5.8% in May, 2.6% in April and 4.9% in March.
Exports to most markets continued to ebb, with shipments to China falling 14.9% in June from a year earlier, while those to the US were down 2.1%.
Import in June decreased by 9.44% to $18.2 billion, leading the country to register a trade surplus of $3.21 billion.
For the first six months, the country’s overall shipments dropped 2.91% from the same period last year to $113billion. The trade surplus for the period amounted to $3.94 billion.
Pimchanok Vonkorpon, director-general of the Commerce Ministry's Trade Policy and Strategy Office, said the dip in June was clearly an effect of the trade war between the world’s two largest economies as Thailand is a key supply chain for China.
Lower global oil prices also led export values of most related products to drop, she said.
The impact from the trade war is expected to stay in effect until the third quarter, said Ms Pimchanok.
However, she believes exports will start recovering in the fourth quarter. Despite a variety of challenges in common with other export-oriented countries, many positive factors should strengthen Thai exports in the latter half of 2019, namely positive brand image, an opportunity to substitute products subject to retaliatory measures in US and China markets, expansion of tourism-related products, and potential exports to new areas based oncustomised strategies, said Ms Pimchanok.
The troubling external factors to monitor include unresolved trade disputes, the global trade slowdown, decreasing commodity prices, currency appreciation caused by expansionary monetary policy in major economies, the business cycle of electronic products and manufacturing adjustments to new consumer demand, such as for electric cars, she said.
“If Thailand is able to maintain export values at an average of $20-21 billion a month for the remainder of the year, overall shipments are likely to grow 0-1% this year,” said Ms Pimchanok.