Thailand's exports unexpectedly rose for a second straight month in September on improved demand from key markets, a hopeful sign of a turning point for the country's exports and growth this year. Exports, worth about two-thirds of the Thai economy, have declined in the past three years, a reason why the junta has struggled to revive Southeast Asia's second-largest economy after taking power in May 2014 to end political unrest.
But in a rare bit of good news, the commerce ministry said exports might not contract this year, with commodity prices expected to improve along with higher oil prices and global demand. "The ministry is confident that the economy will get better, not only exports but also imports. So exports will be doing well in the final quarter and into next year," senior ministry official Pimchanok Vonkhorporn told a news conference Customs-cleared exports in September rose 3.4 percent from a year earlier, ministry data showed on Wednesday, compared with the median forecast for a fall of 2.0 percent in a Reuters poll.
In August, exports also surprisingly increased 6.5 percent, boosted by auto shipments, but they still declined 0.7 percent in the January-September period. The Bank of Thailand has predicted exports will fall 2.5 percent this year, but deputy governor Mathee Supapongse told Reuters on Tuesday exports might perform better than forecast.
Charnon Boonnuch, economist at Tisco Securities, said the chance for exports to expand this year "is quite high" and "we see this as a turning point for Thailand's economy."
But Benjamin Shatil, economist at J.P. Morgan based in Singapore, said "it is difficult to gauge whether recent export strength marks a broader inflection in external demand or a temporary cyclical lift. We suspect that this external support to growth will be fleeting."
"While the rise in exports likely supported 3Q GDP growth, we are sceptical about the durability of this external-led boost into 2017," he said. In September, exports to China rose 7.7 percent from a year earlier, while those to Europe increased 9.1 percent. Shipments to the United States were up 6.6 percent last month and exports to Japan rose 5.5 percent.
Export growth was helped by higher shipments of industrial goods, including electronics and home appliances. September imports were 5.6 percent higher from a year earlier, rebounding from a 1.5 percent fall in August, which led to a trade surplus of $2.55 billion for September. Many imported materials in Thailand are assembled into completed goods and shipped out again.