- Exports rebounded in December (4.7% YoY; consensus: -2.4%; Nov: -3.6%), charting the first expansion since April and the largest growth in 22 months.
- By product, the better performance was broad-based, predominantly led by shipments of manufacturing goods.
- Manufacturing (6.7%; Nov: -2.9%): the fastest growth since Feb-19, underpinned by a surge in exports of electronic machines (15.9%; Nov: -1.4%), particularly hard disk drives (2.5%; Nov: -23.1%) on the back of rising needs for storage capacity amid prolonged remote working and learning trend.
- Agro industrial (-7.5%; Nov: -12.2%): smallest drop in three months, reflecting lessened fall in white sugar (-55.2%; Nov: -65.9) and canned tuna exports (-7.0%; Nov: -13.3%), as well as a lower base in the preceding year.
- By destination, improved demand growth was seen across all trading partners
- This was underpinned by a positive turnaround in demand from the ASEAN-5 (0.6%; Nov: -15.3%), China (7.1%; Nov: -8.9%) and Hong Kong (9.9%; Nov: -13.9%).
- Imports spiked to a nine-month high (3.6%; consensus: -2.1%; Nov: -1.0%)
- The improvement was attributed to a positive flip in imports of capital goods (8.9%; Nov: -2.5%) and consumer goods (2.1%; Nov: -7.7%), as well as a surge in demand for raw materials & intermediates (11.2%; Nov: 5.9%).
- Trade surplus rose to a two-month high (USD1.0b; Nov: USD0.1b), as exports grew at a faster pace (6.1%) compared to imports (1.3%) on a MoM basis.
- 2020 export growth (-6.0%; 2019: -2.6%) came in within our expectation. For this year, we foresee exports to recover within 4.0% to 6.0%
- This is on the back of further economic recovery at the global front, mass rollout of COVID-19 vaccine and an upturn in demand for technology-related products. Nonetheless, downside risks remain arising from tighter measures to curb the resurgence of COVID-19 in major export destination and rising freight costs.
- Policy-wise, we expect the BoT to keep the policy rate unchanged (0.50%), noting that daily COVID-19 cases have steadily declined following the new outbreak on 20 December and some provinces have started to loosen the curbing measures.
Source: Kenanga Research - 25 Jan 2021
