Kiatnakin Phatra Securities (KKPS) stated that Thailand recorded a significant trade deficit of US$3.3 billion in April, a sharp reversal from the US$0.97 billion surplus seen in March. This deficit was also wider than the US$1.2 billion expected by consensus forecasts.
The deterioration in the trade balance occurred despite continued growth in exports. Exports rose by +10.2% year-on-year in April, reaching US$25.6 billion. This figure, however, represented a slowdown compared to the robust +17.8% growth reported in March. Excluding gold, export growth was considerably lower at +7.2%.
Export performance was supported by increases in industrial and agro-industrial products. Industrial products remained the primary driver, growing +16.6% year-on-year. Key contributors to this growth included computers and parts (+75.1%), jewellery (+117.2%), and electronics (+34.4%). Exports to the US were particularly strong, rising +23.8% year-on-year, partly driven by accelerated shipments ahead of potential tariffs. However, analysts suggest this surge appears temporary and has had limited impact on the domestic economy, as reflected in continued contraction in manufacturing production.
In contrast to the growth in industrial goods, agricultural exports saw a notable decline of -19.6% year-on-year. This was largely due to a significant -44.1% drop in rice exports, impacted by lower volume and price following India’s lifting of export restrictions. Other agricultural products like cassava, fresh fruits, and canned seafood also fell, though rubber, chilled and frozen chicken, refined sugar, and wheat-based processed foods saw expansion.
The primary factor behind the shift to a deficit was a sharp surge in imports, which rose by +16.1% year-on-year, significantly exceeding the 7.0% consensus. This import growth was broad-based. Capital goods imports jumped +27.5%, driven by items like electrical machinery and computer components. Raw material imports also increased by +17.4%, led by electronic components. Consumer goods imports also saw growth, while vehicle imports remained weak. This strong import activity is thought to be supporting both re-exports and domestic consumption.
Looking ahead, the outlook for Thailand’s trade balance and exports remains weak in the coming quarters. The strong performance in the first quarter is now viewed as temporary, likely due to front-loaded shipments. Exports to the US are expected to soften in the second half of the year. Furthermore, increasing external pressure—including potentially more Chinese products entering regional markets as China seeks alternative markets amid tensions with the US—combined with limited domestic production gains, presents downside risks.
