The trade slump has bottomed
A month ago, we noted that Thailand’s export slump bottomed in June. The trade data released today for July supports this view.
Although exports continued to shrink on a year-on-year basis, the 11.4% fall was much shallower than 23% YoY plunges in May and June. The outcome was better than our -13.0% YoY forecast and the consensus of -18.8%. The improvement was due to a 14% month-on-month bounce in total shipments, a second straight positive reading helped by strong gains in vehicles and parts and jewellery exports.
As for exports, two consecutive month-on-month increases are hopeful signs of the start of a recovery in imports. However, this was overshadowed by a high base effect which deepened the year-on-year import decline to 26.4% from 18.1% in June. Fuel, raw materials and consumer goods imports stood out for their gains in July.
