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25 Jul 2020

Econ Digest

Despite Thailand’s exports shrinking by 23.2% in June, the exports of food products grew by 6.8% as lockdown measures abroad boosted the demand for Thai food products

The value of Thai exports in June 2020 stood at USD 16,444 million, shrinking 23.2 percent YoY. As a result, Thai exports contracted by 7.1 percent YoY during the first half of 2020 due to the severe impact of the COVID-19 pandemic and the enforcement of lockdown measures abroad, which resulted in weak global demand and stagnation in some parts of foreign supply chains and longer transit times for international shipments.

 

The contraction of Thai exports in June was led by automobiles, parts and accessories (-43.1%), rice (-25.6%) and electrical appliances (-15.2%). However, Thai food exports continued to grow at 6.8%, partly thanks to lockdown measures abroad which caused stagnation of production activity and supported demand for Thai food products, both directly from the increased import demand and indirectly as a substitute for other import sources. Classified by country, China and the United States were the only two major markets where Thai export value grew positively, at 12.0% and 14.5% respectively, in June.

 

            KResearch projects that Thai exports in 2020 will shrink at a double-digit rate, which is more significant than the previously estimated -6.1%, as the global economy faces increased risk from the impact of the COVID-19 pandemic that will continue to unravel into the near future, despite the promising news on the progress of COVID-19 vaccine development. Moreover, the trade conflicts between the US and its trading partners, including western countries and China, has become a risk factor that will put pressure on global and Thai exports for the remainder of the year.         

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Econ Digest