Abstract
Thai merchandise exports declined for the fifth consecutive month in February, but signs of recovery began to emerge. Exports fell by 4.7% YoY, compared to January’s drop of 4.5% YoY. However, seasonally adjusted month-on-month growth improved by 3.8%, compared to -3% in January. Agricultural and agro-industrial product exports increased, while principle manufacturing products shrank. Exports to Western markets, namely the US and EU28, declined, but China’s slowing contraction and the Middle East’s growth offer hope. Imports increased by 1.1%, but excluding gold, decreased by 1%, widening the country’s trade deficit for the eleventh consecutive month.
Thai merchandise exports contracted in February, marking a fifth consecutive month decline. However, signs of recovery started to emerge.
The value of Thai exports in February 2023 was at USD 22,376.3 million, down by -4.7%YOY. Such growth marked a 5 consecutive months decline, with the contraction slightly decelerating from -4.5%YOY in January. However,
in terms of the seasonally adjusted month-on-month growth, exports in February improved by 3.8%MOM_sa, significantly improved from -3.0%MOM_sa in the prior month. Furthermore, excluding gold (a product that does not reflect actual international trade conditions), Thai exports during the month contracted by merely -2.5%YOY compared to -4.4%YOY in January.
Exports of agricultural and agro-industrial products returned to an expansion, while exports of principle manufacturing products continued to shrink.
In February, exports of major products started to show signs of improvement, in which (1) Exports of agricultural products returned to growth for the first time in 5 months at 1.5%. The key products driving growth were fresh/ frozen/ dried fruits, with 95.0% growth primarily from exports to China, a sizable market with robust growth after COVID-19 curbs eased, in addition to boosts from the low base in the prior year. Other key drivers included Chilled or frozen poultry cuts, with 61.6% growth, up from 50.0% from the prior month. (2) Exports of agro-industrial products also returned to growth for the first time in 3 months at 5.6%, after declining by -3.3% in January. The key products that boosted growth were exports of animal or vegetable fats and oils, which increased by 171.4%, improving from 124.0% in January. Similarly, exports of sugar returned to the first contraction in 3 months at 21.4%. (3) Exports of principle manufacturing products continued to contract for the fifth consecutive month at -6.2%, worsening from -5.4% in January. Such weakening growth was prompted by the slump in unwrought gold exports at -75.3%, compared to -14.8% in the prior month, as well as exports of plastic beads and chemicals product that continued to plummet for the eighth and tenth consecutive month, respectively. On the other hand, exports of other manufacturing products, including semi-conductors devices, transistors, and diodes, Electrical transformers and parts thereof, and motor cars, parts and accessories, continued to improve; and (4) Exports of mining and fuel products dropped by -10.0%, after increasing by 6.8% in the prior month, as exports of refined fuels decreased by -3.7% compared to 16.2% in January.
Exports to the US and EU28 worsened according to economic conditions and heightened uncertainties. Meanwhile, exports to China contracted at a slower rate.
In the big picture, exports to different markets saw uneven growth in February. Exports to the western markets declined following economic conditions as well as heightened uncertainties. Meanwhile, exports to China and new potential markets for Thai exports improved, in which (1) Exports to the US contracted by -9.5% compared to -4.7% in the prior month. Such a performance marked a 33 months low following weakening US economic conditions, which should further worsen this year. (2) Exports to EU28 reverted to a -0.5% contraction after increasing by 2.7% in the prior month. The decline was led by exports to Switzerland that tumbled by -80.7% after surging by 138.1% in 2022 as exports of Precious stones and jewellery plummeted. (3) Exports to China started to recover despite posting declining growth at -7.9% as the dropped drastically improved from -20.8% in the prior month. Furthermore, such a performance was the smallest contraction in the past 8 months, suggesting the resumption of Chinese demand after the reopening. Furthermore, exports to Hong Kong also returned to the first expansion in 10 months at 28.6%. (4) Exports to CLMV continued to decline for the fifth consecutive month at -4.9%, though stalling from -11.1% in the previous month; and (5) Exports to the Middle East continued to surge by 23.3%, despite slightly stalling from 23.6% in January. Exports to Saudi Arabia led the growth, with an expansion of 56.2%, making Saudi Arabia the market with the highest export growth in February.
Thai trade deficit continued to widen for the eleventh consecutive month, while import growth stalled.
The value of imports in February stood at USD 23,489.7 million, increasing by 1.1%, or slowing compared to the 5.5% growth in the prior month. However, excluding gold (a product that does not reflect actual international trade conditions), imports…
