Thai Exports Surge in December, Beating Forecasts

Thailand's customs-cleared exports rose by a robust 8.7% year-on-year in December, surpassing analysts' expectations of an 8.15% increase. This strong performance follows November's 8.2% rise and maintains the commerce ministry's export growth target of 2% to 3% for 2025. The ministry reported that exports, a key driver of Southeast Asia's second-largest economy, increased by 5.4% in 2024 to a record $301 billion.

Imports rose by 14.9% in December from a year earlier, above a forecast rise of 13.65%. This led to a trade deficit of $10.6 million in December, compared with a forecast surplus of $290 million. In 2024, imports rose by 6.3% from 2023, with a trade deficit at $6.3 billion.

Rice export volumes dropped by 7.1% in December from a year earlier but rose by 13.4% to 9.95 million metric tons in the whole of 2024. Thailand, the world's biggest rice exporter after India, expects rice shipments to drop to about 7.5 million metric tons in 2025 due to more competition from India and less demand from Indonesia, according to the Thai Rice Exporters Association.

Thailand's export growth in December was driven by several key factors, as reported by the commerce ministry. The country's customs-cleared exports rose by 8.7% year-on-year, slightly higher than analysts' forecasts of 8.15%. This growth was supported by a few notable trends:

1. Increased demand for Thai goods in international markets: Thailand's exports, a key driver of Southeast Asia's second-largest economy, increased by 5.4% in 2024 to a record $301 billion. This growth was supported by strong global demand for Thai products, particularly in sectors such as electronics, agricultural and food products, and lifestyle goods like cosmetics and pet foods.
2. Growth in exports to specific markets: Thailand's exports to certain markets, such as Switzerland, have been increasing. In the first ten months of 2024, Thailand exported over $3.6 billion to Switzerland, reflecting a 5% year-on-year increase. This trend positions Switzerland as Thailand's second-largest trading partner in Europe.
3. Competitive pricing and quality: Despite increased competition from other countries like India, Thai exporters have managed to maintain their market share by offering competitive pricing and high-quality products. For instance, Thailand's export share of hard disk drives (HDD) has been on an upward trend since 2016, despite growing competition from solid-state storage. The per unit value of Thailand's HDD exports to the US has also been growing, along with an increase in the country's share of HDD imports into the US.

In conclusion, Thailand's export growth in December 2024 was driven by increased demand for Thai goods in international markets, growth in exports to specific markets, and competitive pricing and quality. The country's exports, a key driver of Southeast Asia's second-largest economy, increased by 5.4% in 2024 to a record $301 billion. Despite a slight trade deficit in December, Thailand's overall trade balance in 2024 showed a trade deficit at $6.3 billion. The Thai Rice Exporters Association expects rice shipments to drop to about 7.5 million metric tons in 2025 due to more competition from India and less demand from Indonesia.