Thailand's outward trade recorded a steep contraction for the second consecutive month in June 2020. As a result, 1H20 exports shrank 7.1 percent YoY. June shipments were valued at USD16,444 million, shrinking 23.2 percent YoY due to the unfolding coronavirus (COVID-19) pandemic and lockdown measures in many countries, which have in turn weakened global demand and disrupted part of supply chains abroad, making it longer to transport goods from one country to another.
China and the US were the only two markets where Thai exports grew in June 2020 at 12.0 percent YoY and 14.5 percent YoY, respectively. Thai shipments to China grew because of the low 2019 base amid the steepest contractions seen in exports of chemicals and rubber products to China. High shipments to the US were attributable to substantial exports of computers, equipment and related parts.
When compared to the overall Thai shipments during the previous two months, the export performance in June 2020 was better than in May 2020. Excluding the value of gold exports, June shipments overall shrank 17.3 percent YoY, bettering the 27.9 percent YoY contraction reported for May 2020. Although all export categories shrank in June, their contractions were at a slower pace than in May 2020.
KResearch assesses that the overall Thai exports in 2020 may post a double-digit contraction compared to our prior estimate of a 6.1 percent YoY shrinkage as the global economy will likely experience increased risk resulting from uncertainties surrounding the COVID-19 pandemic despite a process seen from the development of a vaccine. In addition, renewed tension between China and the US, plus other Western nations is another downside risk that may pressure global trade and Thailand's outward trade during the remainder of 2020.