BANGKOK: Thailand’s growth of imports during the month of June is likely to have slipped into negative territory, after recording a surprise upswing in May that had led to some positive sentiments in the markets, particularly the recent string of encouraging data from the local front.
The import growth is expected to have slipped back to -8.7 percent y/y in June, which means average growth for May and June is at -4.3 percent, DBS reported. Further, private consumption growth has averaged a mere 1.2 percent in the past three years, slower compared to the flood-crisis 2011 period.
In addition, the trade account is likely to have registered a strong USD 11.8 billion surplus in the first half of 2016, despite export growth being stuck in the negative territory. The current account is likely to register a surplus in excess of 8 percent of gross domestic product this year, the report added.
Moreover, imports have remained on a downward slope consistently over the past three years even during bouts when the baht has actually strengthened on a relative basis. While some may foresee the current account surplus as a sign of optimism for the economy, it is arguably more favorable to see a narrower surplus if driven by import growth amid a stronger domestic demand.
