Thailand’s export woes are linked
to an uneven global recovery
Export growth is critical to the success of
Thailand’s economy. Exports account for more
than 60 percent of Thailand’s GDP.4 However,
Thailand’s exports have shrunk over the last two
calendar years and are likely to shrink this year
as well. The BOT forecasts a drop in exports
of more than 1.5 percent in 2015.5 Exports in
terms of US dollars have fallen every month for
the first seven months of 2015, declining 7.7
percent in June from a year ago, the largest drop
since late 2011.6
Thailand’s weak export performance is likely
linked to the uneven recovery of the global
economy. Exports to China, Thailand’s largest
trading partner, accounted for 11 percent
of total exports in 2014. Exports to the United
States, European Union, and Japan accounted
for 10.5 percent, 10.3 percent, and 9.6 percent
of total exports in 2014, respectively.
Furthermore, the Association of Southeast
Asian Nations (ASEAN) accounted for 26
percent of Thailand’s total exports in 2014.
Strikingly, in the first half of 2015, Thailand’s
exports to almost all its major trading partners
declined relative to the same period a year ago.
Exports to China fell 7 percent, while exports
to the European Union and Japan fell 7 percent
and 6.6 percent respectively. A slowdown in
China has far-reaching effects, indirectly resulting
in Thailand’s exports to ASEAN shrinking
by 4.2 percent in the first half of 2015. China’s
recent devaluation of the yuan is yet another
concern for Thai exporters, as a weaker yuan
is likely to weaken the purchasing power of
China’s importers. The only bright spot for
Thailand’s exports is the United States, which
climbed 4.1 percent from a year ago in the first
half of 2015.
Another factor behind Thailand’s weak
export performance is that some of its electronic
exports are outdated in terms of technology.
For example, Thailand is the world’s
second-largest producer of hard disk drives.
However, hard disk drives, used primarily in
personal computers, are being replaced by solid
state drives that are used in tablets. Electronics
are the largest component of Thailand’s export
portfolio (14.6 percent of total exports in 2014).
Year-over-year growth in electronics exports