Thai exports continued to expand in January despite signs of a short-term slowdown from Omicron casualties. Impact from Russia-Ukraine war was not yet seen but warrants monitoring.

Exports in 2022 continued to grow during the first month of the year.

The value of exports expanded by 8% during the first month of 2022, significantly slowing from the 24.7% expansion in the previous month. Such a figure corresponded to the stalling export growth in various key economies in January due to the global Omicron outbreak. Furthermore, the stalling growth reflected hastened global trade and economic recovery in the previous periods. However, looking forward, exports should continue to improve according to the recovery of global economic conditions, despite potential global trade slowdowns from the Russia-Ukraine war.

 

Thailand’s trade balance may decline in 2022.

In 2022, Thailand’s trade balance may decline as imports expanded by a faster rate than exports, and the price of imported goods heightened in comparison to the price of exported goods. In particular, the price of energy-related products continued to fluctuate and remained high due to supply conditions that may worsen from the Russia-Ukraine conflict. Hence, the energy demand will likely increase following the recovery of global demand.

 

Exports should continue to improve, though impacts from the Russia-Ukraine war warrant monitoring.

At the present, EIC is re-assessing the export forecast figures for 2022. Going forward, notable export growth drivers include the continual recovery of global trade and economic conditions, the lower-than-expected impact from the Omicron outbreak, the higher value of oil-related exports, and the benefits from participating in the Regional Comprehensive Economic Partnership (RCEP) trade agreement. On the other hand, the playouts of the Russia-Ukraine war, including international sanctions on Russia, warrant close monitoring as the conflict could hamper Thai exports, as well as other sectors, such as manufacturing, agriculture, and livestock. Such sectors should see particular impacts from higer energy and raw materials costs. Moreover, exports to Europe, one of the main destinations for Thai exports, may also weaken.