Thailand's outward trade was USD18,819 million, shrinking 11.4 percent YoY in July 2020. Excluding oil, gold and arms shipments, Thai exports, however, contracted 13.0 percent YoY. Gold exports reverted to growth of 37.2 percent YoY in July in line with global gold prices, while industrial product and oil-related shipments continued to shrink, in particular automobiles, airconditioners, plastic pellets, chemical and refined petroleum products in alignment with global economic conditions and sluggish consumption abroad. Thai exports that continued to grow from the previous month include canned tuna, pet foods, rubber gloves, chilled/frozen chicken, semiconductors, transistors and diodes. As a result, Thai shipments during 7M20 shrank 7.7 percent YoY.
If an individual market for Thai exports is taken into account, the US is the only market where the value of Thai shipments grew for the second consecutive month at 17.8 percent YoY in July 2020, led by shipments of computers, related equipment and parts, plus rubber products, which saw a substantial increase. Meanwhile, Thai exports to China reverted to a slight contraction at 2.7 percent YoY in July 2020 due to the impact of a new wave of coronavirus (COVID-19) and flooding in China's key manufacturing areas such as those in Wuhan. Key shipments that saw steep contractions include plastic pellets, automobiles and rubber.
Although Thai exports in July contracted at a slower pace than those reported in the preceeding two months, increased risks to the global economy and the appreciating Baht have led KResearch to revise our 2020 export growth forecast downward to a contraction of 12.0 percent YoY, from the previous shrinkage of 6.1 percent YoY. Our new export growth projection is also based on the fact that the COVID-19 pandemic may not be dealt with in 2020. Although some progress has been seen in the development of a vaccine, it remains highly uncertain and may take longer before being made available to the public. As a result, the global economy will continue to experience increased risks while the US-China tensions are set to worsen, and this may in turn exacerbate the trade war, thus pressuring global trade and economy, going forward. In addition, the strengthening Baht against the greenback is another factor that will weigh on Thai exports during the remainder of 2020. Meanwhile, Thai imports reported a steeper contraction of 26.4 percent YoY in July 2020, led by a 24.1 percent YoY shrinkage in raw material and intermediate product imports, suggesting that overases purchase orders for the year-end holiday season will continue to contract.