Thai Exports Struggle: Western Demand Slumps, China Begins Recovery

Thai exports faced a 4.7% year-on-year (YOY) decline in February 2023, marking the fifth consecutive month of contraction. The drop in exports to the US and Europe was fueled by worsening economic conditions and growing uncertainty. However, exports to China showed signs of improvement, shrinking at a slower pace.

In February, Thai imports grew 1.1% compared to the previous year, resulting in a trade deficit of $1.11 billion. This marks the 11th consecutive month of trade deficit for Thailand. Despite the continuous contraction in exports, Thai imports demonstrated sustained demand, expanding in line with the country’s economic recovery.

Exports to the US market saw a sharp 9.5% contraction, while the European market (EU28) experienced a 0.5% decline. On the other hand, exports to China contracted by only 7.9%, the lowest in 8 months, suggesting a gradual recovery of demand from China.

Thai exports may be struggling, but there are glimmers of hope. With China’s demand slowly bouncing back and new potential markets emerging, the current account should start to improve in the coming months.