The slowing global economy, persistent trade war and strong Baht caused Thailand's outward trade to shrink 2.2 percent p.a. during 8M19. The value of August exports reverted to a contraction of 4.0 percent p.a. However, our industrial exports overall to the US continued to grow, including computers, electrical appliances, cars and auto-parts, reflecting positive impact from the trade war as the US needed to import those products to substitute Chinese imports.
Gold shipments continued to thrive in August, thanks to lofty global gold prices. Excluding gold exports, Thailand's August outward trade, however, contracted 9.8 percent p.a. Gold prices have remained high amid increased risks to the global economy, including conflicts in the Middle East, the protracted US-China trade dispute and uncertainty surrounding Brexit. As a result, it is expected that gold shipments will continue to bolster the value of September exports.
Given this, 2019 Thai exports may lean towards the lower end of our projection band at (-)2.0 to 1.0 percent. KResearch has, however, assessed that high growth in gold exports may not be sufficient to offset the negative impact of global economic risks on the international trade and Thais exports during the remainder of 2019. To prevent Thai exports overall from contracting further in 2019, the value of Thai shipments must grow at an average rate of 4.5 percent p.a. during the final four months of 2019. It would be very challenging to achieve such a growth amid increased risks seen in the global economy.
Despite the contraction seen in Thai exports overall, our high trade surplus continues to drive up the Baht. Thailand's high trade surplus has partially been supported by increased gold exports. Since June 2019, the value of our gold exports has grown faster than that of gold imports because of lofty global gold prices. If the value of gold exports is deducted from that of imports, our trade surplus may narrow by about half and there was a trade deficit in July 2019. Thailand's robust trade surplus is an important factor that has driven up demand for liquidity in the Baht and in turn the value of Thai currency.