According to the bank, export contraction would extend into the second quarter due to the slowdown of trading partner economies and global trade, which were affected by increasing trade tensions between the US and China.
Director of the BoT’s economic analysis office Pornpen Sodsrichai said export contract for the fifth consecutive month in May added to the possibility of a second-quarter plunge.
Outbound shipments on a balance-of-payments basis tumbled 7.2 percent year on year in May, a deeper slump than April’s 3.1 percent contraction. May exports fell by 6.1 percent if gold is tripped out.
During January-May, exports dropped 4.5 percent from the same time last year.
However, Pornpen expected shipments would bounce back in the second half. The relocation of manufacturing plants from China to ASEAN, triggered by the US-China trade dispute, will give a boost to Thailand’s exports in the latter half.
“Exports are needed to expand 4.5 percent a month for the remaining seven months this year to make outbound shipments swing back to positive in the second half”, she said.
Pornpen said still-contracting exports could be due to weaker global demand, dampened by slower economic growth in a number of major trading economies, protectionist policies between the US and China, the continued downturn in the electronics cycle and the decline in crude prices.
Export contraction was seen in petroleum-related products, automotive and parts (especially passenger and commercial vehicles), electronics products, agricultural products (notably rice and rubber), and agro-manufacturing products.
But exports in some categories continued to expand, including appliances (especially air conditioners and TV sets), agricultural products, and automotive and parts (particularly motorcycles and car tyres).
The economy in May moderated from the previous month, with private consumption the key driver amid ebbing private investment and public spending.
The value of merchandise imports edged down 0.2 percent in May from the same period last year, mainly due to the sharp contraction of gold value. Excluding gold, the value of merchandise imports grew by 1.1 percent.
Moreover, foreign tourist arrivals in May fell by 1 percent from the same period last year, mainly from the drop in tourists from China as a result of the slowing economy there and stronger competition from neighbouring countries.
Commenting on the firmer baht, Pornpen said the US-China trade war, a clearer domestic political picture and the higher weighting of Thai shares in the global benchmark MSCI strengthen the local currency.
