Thailand: Central bank upbeat on prospects despite export dip

Exports dropped in July, mainly attributed to lower demand from trading partners in line with a riskier global economy, though Thailand’s economy continues to see signs of recovery, says a Bank of Thailand executive.

According to the central bank’s report on domestic economic conditions in July, the value of merchandise exports, excluding gold and after seasonal adjustment, was down 2.7% from the previous month.

On a year-on-year basis, exports in July grew 3.8%, down from growth of 10.7% in June.

Chayawadee Chai-Anant, the central bank’s senior director, said the decline in the value of merchandise exports is in line with the slowdown in trading partners’ demand. This was seen particularly in exports of metal after demand from China’s real estate sector softened.

In addition, demand fell for Thai electronics exports and shipments shrank for agricultural products to China after accelerating in the preceding period. Nevertheless, exports in some categories increased, including agro-manufacturing products, electrical appliances and automobiles and auto parts.

“The export deceleration is mainly due to the slowdown of global demand, which is unlike the previous period when countries worldwide were beginning to recover from the pandemic and showing strong external demand. However, the Thai economy remains in recovery mode,” Ms Chayawadee said.

Moreover, she said Thailand’s economic rebound has been supported by tourism and private consumption.

In July, the number of foreign tourist arrivals after seasonal adjustment rose to 1.12 million from 767,500 in June. The uptick was attributed to the end of the Thailand Pass system on July 1 and the loosening of cross-border restrictions.

However, private consumption indicators after seasonal adjustment decreased by 0.2% on a month-on-month-basis after accelerating in the preceding period.

Several factors supporting household consumption such as employment, income and consumer confidence gradually improved, while rising living costs added pressure on consumption.