Key Highlights

Exports in December fell by 14.6% YoY, marking the third consecutive month of decline, exceeding market expectations of -11.5%. This downturn is attributed to the slowing global economy, weak consumer purchasing power, and the high base effect from December 2021. Consequently, exports of agricultural products, agro-industrial goods, and industrial products have contracted. For the year 2022, exports grew by 5.5%.

The recent decline in exports is primarily due to a significant contraction in export volumes, while export prices are expected to have passed their peak and are likely to slow down. Krungthai COMPASS estimates that the value of exports in 2023 is expected to grow by 0.7%, supported by the easing of China's disease control measures, which is anticipated to gradually revive demand from China, along with an improving trend in supply chain disruptions.

Export Value in 2022 Grew by 5.5%

The export value in December was $21.719 billion, continuing to decline by 14.6% YoY from the previous month's decline of 6.0% YoY. Exports across all categories contracted, including agricultural products, agro-industrial goods, and industrial products, due to the slowing global economy, weak consumer purchasing power, and the high base effect from December 2021. Notably, gold exports this month fell sharply by 80.5%, resulting in an adjusted export value decline of 13.9% YoY when excluding gold. Overall, exports for the year 2022 grew by 5.5%.

Most Product Exports Continued to Decline

• Industrial product exports declined for the third consecutive month by 15.7% YoY, worsening from the previous month's decline of 5.1% YoY, driven by exports of cars, equipment, and components (-17.1%) and jewelry and ornaments (-12.4%). Oil-related products (-25.7%) also saw a fifth consecutive month of decline due to falling global oil prices. Exports of computers and equipment (-24.3%) have contracted for the third month in a row. However, some products continued to show growth, such as fax machines, telephones, equipment, and components (+65.6%) and semiconductors, transistors, and diodes (+83.7%), as well as motorcycles and components (+8.1%). For industrial product exports, 2022 saw a growth of 4.4%.

• Agricultural and agro-industrial product exports have contracted for the third consecutive month by 11.2% YoY, worsening from the previous month's decline of 2.0% YoY, with cassava products (-12.4%) and granulated sugar (-45.4%) returning to contraction. Exports of rice (-4.1%), rubber (-47.7%), and canned and processed fruits (-20.5%) also continued to decline. However, some products showed good growth, including fresh/frozen/dried fruits (+21.6%), canned and processed seafood (+1.5%), and fresh/frozen chicken (+22.8%). For agricultural and agro-industrial product exports, 2022 saw a growth of 8.8%.

Most Market Exports Also Declined

• USA: Exports fell by 3.9% YoY, with significant declines in computers, equipment, rubber products, and radio and television receivers and components. However, products that grew included fax machines, telephones, semiconductors, transistors, and diodes. (Exports for 2022 grew by 13.4%).

• China: Exports continued to decline for the seventh consecutive month by 20.8% YoY, with significant declines in computers, equipment, rubber, and chemicals. Products that grew included fresh/frozen/dried fruits and rubber products. (Exports for 2022 contracted by 7.7%).

• Japan: Exports declined for the fourth consecutive month by 13.7% YoY, with significant declines in chemicals, processed chicken, and fax machines and telephones. Products that grew included electrical appliances and motorcycles and components. (Exports for 2022 contracted by 1.3%).

• EU27: Exports fell by 4.9% YoY, with significant declines in cars, equipment, computers, and rubber products. Products that grew included motorcycles and components and transformers. (Exports for 2022 grew by 5.2%).

• ASEAN5: Exports declined for the third consecutive month by 24.2% YoY, with significant declines in refined oil, plastic pellets, and jewelry and ornaments. However, products that grew included crude oil and computers. (Exports for 2022 grew by 9.5%).

The import value in December was $22.753 billion, returning to a decline of 12.0% YoY from the previous month's growth of 5.6% YoY, due to the slowing global economy and falling commodity prices, with fuel imports also declining (-13.2% YoY). Imports of raw materials and semi-finished goods (-17.1% YoY), capital goods (-8.6% YoY), and consumer goods (-7.5% YoY) continued to decline. Imports for 2022 grew by 13.6%. The trade balance in December recorded a deficit for the ninth consecutive month at -$1.034 billion, with a total trade deficit for 2022 of -$16.123 billion.

Implication:

  • The recent decline in exports is primarily due to a significant contraction in export volumes. The value of exports has been declining since October 2022 due to a drop in export volumes in October (-6.5% YoY) and November (-8.2% YoY) as demand from major markets such as the USA has slowed due to tight monetary policies, and China has implemented zero-COVID measures. In the near future, export volumes are expected to continue to slow due to the global economic slowdown. While export prices may still grow due to the ongoing impact of the Russia-Ukraine war, which keeps commodity prices high, it is anticipated that the growth rate has passed its peak and is likely to slow down.
  • Krungthai COMPASS estimates that the value of exports in 2023 is expected to grow by 0.7%. The easing of disease control measures in China is anticipated to support manufacturing and exports in the near future. Following the relaxation of Zero COVID measures in January 2023, domestic consumption in China is expected to gradually recover, and China's manufacturing sector returning to normal will help alleviate supply chain disruption issues, which is expected to positively impact exports to China.