Thai exports drop less than expected in May, seen improving in second half

BANGKOK  -Thailand’s exports contracted less than expected in May, as higher industrial goods shipments and a weakening baht helped offset some of the impact of sluggish global demand, the commerce ministry said on Tuesday.

Customs-based exports, a key driver of Thai growth, declined 4.6 percent in May from a year earlier, beating a forecast for an 8 percent year-on-year drop in a Reuters poll. Exports jumped 12 percent from April.

“A positive factor for overall exports was the weakening baht,” Keerati Rushchano, the ministry’s permanent secretary, said in a press briefing.

The baht has depreciated 1.8 percent against the dollar so far this year.

The global economic outlook should also improve, which will be positive for exports from now until the end of the year, Keerati said. The ministry maintains its target of 1 percent-2 percent annual export growth for 2023, he added.

While global economic uncertainty has weighed on demand, the global manufacturing sector has shown signs of recovery from production chain disruptions, the ministry said in a statement.

Exports of industrial goods rose 1.5 percent in May from a year earlier, picking up for the first time in eight months, helped by higher shipments of automobiles and semiconductors.

Shipments of agricultural goods, however, fell 27 percent in May from a year ago, with rubber down 37 percent year-on-year. But rice exports jumped 85 percent from May 2022.

Exports to the United States rose 4.2 percent year-on-year last month, while shipments to Japan fell 1.8 percent. Exports to China slumped 24 percent year-on-year due to the country’s uncertain economic recovery.

Thailand posted a trade deficit of $1.8 billion in May versus a forecast deficit of $300 million, with imports showing a 3.4 percent year-on-year drop.

For the January-May period, exports declined 5.1 percent from a year earlier, imports were down 2.5 percent and the trade deficit stood at $6.4 billion.