1. KBank Capital Market Perspectives Market Updates
Macro / FX / Rates
Exports and imports at slower pace of growth
18 January 2011
Overview:
The Customs Department today reported trade performance (customs-cleared) for December Nalin Chutchotitham - Kasikornbank
period. Exports rose by 18.8% yoy, showing a deceleration from the overall growth rate of nalin.c@kasikornbank.com
20.8% in Q4. This was primarily due to a substantially high base in the year 2009 as well as
the slow down in the pace of economic recovery of trading partners’ economies. Imports
grew by 11.5% yoy, also decelerated compared to the Q4 growth rate of 20.1%. Trade
balance in December increased to $1,295mn from $408mn in November.
2010 vs. 2010 – Annual exports growth was recorded at 28.1%, indicating a full recovery of
Thailand’s exports after 2009’s decline of 14.3% which almost completely erased the growth
of 15.5% earned during 2008. Exports value in 2010 at $195bn topped the year 2008’s value
of $178bn. Annual imports was recorded at 36.5%, reflecting a strengthening domestic
demand when compared to the heavy slump of 25.4% in 2009 and an increase of 28.1% in
the year 2008. Imports value in 2010 at $182bn also topped the year 2008’s value of $179bn.
For the whole year, trade balance surplus total $12.9bn, a decline compared to the year
2009’s surplus of $18.8bn. This was ascribed to the recovery of domestic economy and the
resumption of active imports, especially for private investment.
Going forward, we expect both exports and imports to continue growing, albeit at slower
pace. These movements would be led by economic growth in trading partners’ economies as
well as domestic demand growth. The baht is expected to see a slower pace of appreciation
in the year 2011 after it had finished last year with 11% gain versus the greenback. This is
likely to be supported by trade balance surplus and continued foreign capital flows.
Export destination composition - Comparing exports in the year 2009 and the year 2010,
there are significant declines in the share of exports to EU(15) (99.8% from 10.5%) and the
U.S. (10.3% from 10.9%). on the other hand, there are noteworthy increases in the share of
exports to mainland China (11.0% from 10.6%) and ASEAN(5) (16.4% from 15.1%) .
As for the other export destinations, shares were little changed. Excluding China, exports
share of emerging markets for Thai exports rose from 33.8% to 33.9%. Meanwhile,
secondary markets accounted for 16.3% of total exports in the year, a slight decline from
16.5% in 2009 (includes Hong Kong, Taiwan, South Korea, the Oceania and Canada).
Exports, imports growth, Trade balance USD/THB
% yoy
46
80 4000
44
60 3000
42
40 2000 40
20 1000 38
0 0 36
34
-20 -1000
32
-40 -2000
30
-60 -3000 28
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Trade balance ($ mn, right axis) Export, % yoy Import, % yoy USD/THB
Source: Bloomberg, KBank Source: Bloomberg, KBank
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For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or
sell, or a solicitation of an offer to buy or sell any security. Although the information herein was obtained from sources we
believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained
herein. Further information on the securities referred to herein may be obtained upon request.
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