Thai exports likely to have dropped year-on-year in December

Thailand’s trade data for the month of December is set to release tomorrow. According to a DBS Bank research report, the exports are expected to have recorded a shallow fall of 1.6 percent year-on-year, while imports are likely to have risen 2 percent but still soft on sequential basis. This would leave the trade balance at a surplus lf USD 0.6 billion.

Barring base effects, two concerns linger. Firstly, exports continue to underperform because of mixed signals for crucial sectors, including electronics and auto. On the former, few global lead indicators have been encouraging, indicating towards a bottoming out in trend growth on restocking demand and introduction of 5G technology. Secondly, soft import demand points to weak domestic demand environment last year.

“Into 2020, we expect the reliance on consumption and government spending to rise, to lift growth to 3 percent y/y, better than last year, but still below trend”, added DBS Bank