Basic Needs in Pandemic Slows Down Thai Exports Drop
Published: September 24, 2020 at 4:38 pm
A contraction of more than 10% is now unlikely, a top official at the Commerce Ministry says.
The pandemic has caused all industries in Thailand to experience a contraction, most particularly in the exports and tourism industries. However, data shows that people’s basic needs during the pandemic has the side effect of slowing down the slump in the export industry.
This was also made possible by the efforts of individual trading partners to keep the coronavirus at bay and still continue to make trade possible. Countries also remain hopeful that there will be a vaccine in the near future, spurring commerce on despite the unseen threat of COVID-19.
Thus, if trade proceeds as it is now, the Ministry of Commerce is confident that the exports industry will only experience a contraction of less than 10%.
According to Pimchanok Vonkorporn, there is no likelihood of a double-digit contraction by the end of the year. Instead, the most that the industry will experience is an 8% contraction in a worst case scenario.
Ms. Pimchanok, who is the director-general of the Trade Policy and Strategy Office of the Commerce Ministry, pointed out that exports for the month of August is at $20 billion – the highest the industry experienced in the five months following the start of the pandemic.
She explained that the industry might record a 5% contraction only, but that is if exports can pick up an average of $20 billion in the next four months. If the industry averages only $18.2 billion in the same time period, the contraction will be at 8%.
This recovery was made possible by significant demand from overseas for personal protective equipment like surgical gloves, as well as for work-at-home essentials like consumer appliances, healthcare items and food stuffs.
For instance, the Ministry reported, exports for palm oil, chilled and frozen pork, pet food and cassava products increased 600%, 962%, 22.3% and 15.6%, respectively.
Exports for rubber gloves, washing and dry cleaning machines, fax machines, telephones, equipment and parts, and gold also expanded 126%, 31.3%, 35.8%, and 71.5%, respectively.
Exports dropped 7.9% year-to-year on August, which is a marked improvement from 11% year-to-year in July, and 23.2% in June.
Meanwhile, cumulative data from the first eight months of 2020 show that exports were 7.8%. Total export earnings are currently at $153 billion. By comparison, imports also dropped 15% to $135 billion.
According to Ms. Pimchanok, the uptrend also jives with the global economic outlook of the Organization for Economic Cooperation and Development. In the report, data shows that the world economy is gradually improving after the sudden shock of the COVID-19 in March.
Instead of the 6% previously noted, the global Gross Domestic Product is now expected to contract only by 4.5%. China and the United States are still in the forefront of global trade, driving this trend towards global recovery.
Ms. Pimchamok noted that other global indicators are also pointing towards global recovery.
Thailand is currently the world’s 22nd top exporter of goods and services. In 2018, the country was able to export overseas a total of $252.49 billion worth of goods and services.