Thailand’s exports rose 24.2 percent in December, with full-year growth of 17.1 percent to US$271 billion. With exports growing by double digits for four consecutive months, economists believe this sector will play a key role in Thailand’s economic recovery this year.
In December, exports totaled US$24.9 billion, setting a new record, with strong sales in main product categories such as passenger vehicles (+47.3%), chemicals (+38.9%), construction materials (+30.7%), agricultural products (+21.1%), and plastics (+20.2%), boosted by the recovery in trade and the global economy, as well as the rush by importers in many countries to build stocks ahead of the New Year.
Krungsri Research said on Tuesday that with December’s record-breaking exports, it expects exports to remain a major driver of the Thai economy through 2022 with a growth projection of 4.5 percent. This prospects is supported by the following factors: (i) the economy of major trading partners, including the US, Europe, Japan, and Asia, is likely to grow above the historical average; (ii) the momentum from growth in key export items and imports of raw materials and intermediate products; and (iii) greater regionalization that is strengthened by the coming into force of RCEP agreement in the beginning of 2022, which will broaden opportunities for Thai manufacturers and exporters. Also, the weakening of the baht will benefit exporters.
Nonetheless, the outbreak of COVID-19 omicron variant in many countries at the beginning of 2022 may have an effect on purchasing power and increase transportation costs when tighter restrictions are implemented.
Meanwhile, the tourism industry is projected to recover slowly, according to Krungsri Research, but the resumption of the Test and Go quarantine-free entry program from February 1 will help speed up that sector’s recovery. Prior to the pandemic, the tourism sector provided around one-fifth of GDP.