International Finance

Trade war weighs as Thailand’s exports contract 2.91% in H1

The Commerce Ministry said that Thai exports contracted by 5.8 percent in May, 2.6 percent in April and 4.9 percent in March

The escalating trade war is impacting Thailand’s exports which dipped for a fourth straight month in June to $21.4 billion. 

 Thailand’s exports contracted by 5.8 percent in May, 2.6 percent in April and 4.9 percent in March, according to the Commerce Ministry. Last month, Thailand’s exports were down 2.15 percent. In the first half of the year, it was estimated at $122.97 billion, down 2.91 percent year-on-year. 

According to media reports, the fall in Thailand’s exports is attributed to weak global demand as a result of trade tensions between the US and China, and low oil prices. The chief export products comprise computer parts and electrical integrated circuits. Exports of agricultural products also dropped for a second consecutive month. For example, rice exports dropped 34.6 percent owing to low demand.

Imports in June were estimated at $18.19 billion which decreased by 9.44 percent, with a trade surplus of $3.21 billion. 

Meanwhile, the International Monetary Fund said that the country should adopt an expansionary policy mix in an effort to support growth, which is slowing due to trade tensions. The policy will comprise fiscal reforms and monetary ease. 

Last year, the Thai economy rose 4.1 percent. The growth in 2019-20 is anticipated to slow as trade tensions are affecting global demand, media reports said. The fund said, “To support domestic demand, the team recommends an expansionary policy mix consisting of judicious use of fiscal space, fiscal reforms, and monetary easing consistent with a data-dependent approach.”

The Bank of Thailand has retained its interest rate 1.75 percent since December and will carry out the next policy review on August 7.

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