The value of Thailand's outward trade stood at USD16,278 million, shrinking 22.5 percent YoY in May 2020 due primarily to lockdown measures abroad. As a result, Thai exports contracted 3.7 percent YoY during 5M20. May shipments plunged to the steepest contraction in more than 10 years in line with regional exports, attributable chiefly to stringent measures to combat the coronavirus (COVID-19) at home and abroad, resulting in a global supply chain disruption. In addition, global demand has weakened substantially amid covid-19 restrictions. However, May shipments continued to be supported by sky-high gold exports of 735.1 percent YoY. Excluding those gold exports, the value of Thai shipments contracted 27.9 percent YoY.
Meanwhile, Thai exports to China grew 15.3 percent YoY in May 2020. The value of Thai shipments only saw growth in China during that period, led by fresh, chilled, frozen and dried vegetable products, in particular durians, automobiles, related accessories and parts, plus rubber products. Thai agricultural and agro-processing exports continued to perform well, thanks to higher demand for several products, such as fruits, cassava products and canned tuna. However, almost all potential Thai industrial shipments reported steep contractions.
Increased risk to the global economy and the Baht's appreciation since April 2020 will continue to pressure Thai exports, going forward. Given this, KResearch maintains our 2020 export growth forecast at a contraction of 6.1 percent YoY and will keep abreast of the global economic development as the second wave of the COVID-19 pandemic may cause Thai shipments to shrink at a steeper pace than our prior estimate. Although gold exports will likely help sustain the overall Thai shipments in 2020, high uncertainties surrounding the global economy, in particular if the COVID-19 pandemic abroad is prolonged, may plunge the global economy into a steeper recession. This may in turn cause the overall Thai exports in 2H20 to contract at a steeper pace than our previous forecast.