Although China and the US reached a preliminary trade agreement on October 10-11, 2019, the ongoing trade war should still drag on, pressuring export growth throughout the remainder of the year. Hence, EIC maintains its -2.5% export growth forecast for 2019.
As for 2020, various factors will continue to suppress export growth, for example, sluggish key trade partners’ economic growth, ongoing and prolonged trade war, and the strong baht. Therefore, EIC views that in 2020, export growth should slightly increase by 0.2%.
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The value of Thai exports (in USD basis) fell by -1.4%YOY in September 2019, however, if excluding gold, the figure dropped to -2.8%YOY.
During the first 9 months of 2019, the value of exports (excluding military arms and weapons shipment in February) shrank by -3.1%YOY, and if excluding gold the figure declined to -5.0%YOY.
The export contraction slowed, supported by automotive exports low-base during the same period in the prior year, in addition to continued high growth in gold exports
September 2019 was the first month that the US’ import tariff increment on Chinese imports equivalent to 15% took effect, which impacted a new spectrum of Chinese consumer goods worth USD 104 billion and stalled global trade figures. However, Thai export growth fell at slower rate due to low-base of automotive exports (5.4%YOY in September 2019 vs -7.5%YOY in September 2018). Furthermore, Thai export growth was supported by satisfactory growth in gold exports from increasing gold prices (110.6%YOY in September 2019 vs -78.7%YOY in September 2018).
Products that were part of China’s supply chain for exports to the US continued to stall
