Export growth hits four-year high
Despite a strengthening currency that would theoretically make exports less competitive, Thailand’s exports grew by 13.2 percent year on year in the month of May, the largest increase in four years and significantly higher than April’s 8.4 percent growth, generating confidence that the Kingdom’s export-driven economy is firmly on track for an improving and solid performance.
The results countered the expectations of many economists who forecast slower export growth because of the rising baht, the Thai currency. The baht has risen about 5 percent against the dollar so far this year, pushing up prices for Thai goods, which many expected would hurt their sales in overseas markets. The Bank of Thailand and exporters have expressed concern about the strengthening currency.
Nevertheless, through the first five months of 2017, Thailand’s exports rose 7.2 percent to $93 billion. Imports increased by 15.2 percent to $88 billion. Taken together, the result was a trade surplus of $5.05 billion for the period. For the month of May, Thailand recorded a trade surplus of $944 million. The Ministry of Commerce, however, is maintaining its forecast of 5 percent export growth for the year.
Vibrant exports and rising confidence also helped produce a slight increase in lending, with large corporations taking up much of the funds. May saw lending increase by 0.43 percent from April, and was 1.67 percent higher than one year ago. The lending was mainly for investments in new businesses or expansions, according to Kasikorn Research Center.
The strong performance in exports was spread across a wide range of sectors. Pimchanok Vonkorpon, director-general of the trade policy and strategy office at the Ministry of Commerce, said agricultural and agribusiness exports rose 17.6 percent year-on-year in May, earning $3.24 billion. Higher shipments of rubber, sugar, rice, vegetables and fresh fruits helped drive export totals up. Durians, in particular, came up smelling like roses, with shipments soaring by 159 percent from the same period last year.
Exports of industrial products rose by 12.8 percent to $15.6 billion. Processed rubber, automobiles, electric circuits, computers and components all rose substantially, while jewelry exports fell slightly.
Most major markets have taken in more Thai goods this year. Exports to China rose 28.3 percent, which is especially significant as rising exports to China helped fuel high growth rates in Thailand during the first decade of the new millennium.
China was followed by Japan, which purchased 25.7 percent more exports than the same period last year. The European Union took in 13.7 percent more Thai goods and the United States took in 8.8 percent more Thai exports.