Thailand's exports growth exceeds expectations

Growth came in at a strong 7.7% yoy in May, notes OCBC.

OCBC Bank said:

Bucking the regional trend and exceeding our expectations for a - 0.9% yoy showing, Thai’s exports growth came in at a strong 7.7% yoy in May. It will be interesting to see how much more upside we will see in the sequential growth for Thai’s exports entering Q3, as it is widely expected that the local manufacturing plants are likely to be working at full gear by then.

As it is, external demand remains very much exposed to plenty of downside risks, and exports of price-sensitive consumer goods such as Electronics & Electrical products make up a sizeable portion (about 15%) of total exports.

Given that downside risks from the external front remain dominant for now, we expect the BOT to continue maintaining its benchmark rate at 3% for the rest of the year, with risks of a 25bps rate cut should growth momentum were to falter in the event of another external shock to the economy.