The value of Thailand's outward trade reverted to growth for the first time in five quarters of 0.9 percent YoY in 1Q20, boosted by favorable gold and electronics shipments. However, oil-related exports were dampened by plummeting crude oil prices.
· The value of Thai exports reached USD22,405 million in March, increasing 4.2 percent YoY and bettering the consensus forecast of a contraction, supported by three major factors. They are a steep growth in gold exports amid growing demand for safe-haven assets, favorable electronic shipments as Thailand has become an alternative export market for hard disk drives (HDDs) to China, where many electronics plants have temporarily shut down, and there was an overlapping month in returning of armaments, including tanks and armored trucks that Thailand imported in February 2020.
· The resumption seen in March exports helped support Thailand's outward trade overall to grow somewhat during 1Q20, while imports shrank 1.9 percent due to sagging imports of capital goods. Given this, Thailand's trade balance remained in a surplus of USD 3,933.7 million in 1Q20.
KResearch expects that the value of Thai exports will contract 5.6 percent in 2020. Despite a favorable growth foreseen in Thai food shipments, thanks to strong demand in the global market, a global economic recession and supply chain disruption due to lockdown measures in many countries may dampen demand for Thai products overall. Although the value of Thai shipment may shrink 5.6 percent in 2020, an average monthly export value of USD19,371 million projected for 2020 is still higher than that reported for 2016.