Thailand’s exports experienced a notable increase of 7% in August, marking the second consecutive month of growth, according to the Ministry of Commerce. Despite the Thai baht reaching its highest value in 30 months against the US dollar, the ministry has maintained its growth forecast for the year at 1-2%. With demand strengthening in key markets, there are expectations for continued export growth, which may surpass the initial projections. However, the appreciation of the baht may affect shipments in the fourth quarter, noted Poonpong Naiyanapakorn, head of the ministry’s Trade Policy and Strategy Office.
In dollar terms, Thai exports rose by 7% in August compared to the previous year, following a remarkable 15.2% increase in July, the highest growth rate in 28 months. This growth exceeded economists’ expectations of a 5.8% rise, as per a Reuters poll. Imports into Thailand also saw an increase, rising by 8.9% in August, surpassing the anticipated growth of 7.3%. This resulted in a trade surplus of $260 million for the month, contrasting with an expected trade deficit of $70 million.
Exports to the United States increased by 3% year-on-year, while shipments to China grew by 6.7%. Conversely, exports to Japan declined by 11.3%. Notably, rice exports surged by 39.5%, totaling 885,387 tonnes, with a corresponding value increase of 47% to $562 million. For the first eight months of 2024, overall exports have risen by 4.2% compared to the same period last year, while imports increased by 5.2%, resulting in a cumulative trade deficit of $6.35 billion.
The baht has appreciated by 4.6% against the dollar since the start of the year, with significant gains observed over the past month, making it the second-strongest currency in the region after Malaysia’s ringgit. Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council, expressed concerns that the stronger baht could impact liquidity and profits, particularly for agricultural goods, which may affect order negotiations.
Next week, the Ministry of Finance and the Bank of Thailand are scheduled to meet to discuss the implications of currency appreciation and inflation targets. The central bank has indicated that it is closely monitoring currency fluctuations and is prepared to take action to mitigate volatility if needed.
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