● Exports softened in April (2.1% YoY; consensus: -4.6%; Mar: 4.2%), but stillbeatingourexpectationof acontraction(-3.7%) as gold exports (1102.7%; Mar: 215.2%) were lifted by higher gold prices.

● By product, the moderation was due to weakness in shipments of manufacturing goods and mineral & fuel

- Manufacturing (4.0%; Mar: 6.4%): eased largely on plummeting automotive exports amid disruptions in global supply chain and as demand for big-ticket items shrivelled.

- Mineral & fuel (-42.2; Mar: -19.7%): sharpest decline in over four years due to falling shipments of refined fuels on steeper plunge in crude oil price as demand was crimpled by widespread lockdown in April.

● By destination, the downtrend wasprimarilyattributable tolowerdemand fromthe euro area (-27.7%; Mar: -14.0%) andrestof-the-world (-13.1%; Mar: -4.1%)

- Of note, exports to the ASEAN-5 accelerated (13.0%; Mar: 6.8%), supported by higher shipments of precious stones.

● Imports charted its deepest fall in more than four years (-17.1%; consensus: -14.3%; Mar: 7.3%)

- Broad-based decline led by imports of raw materials & intermediates (-13.2%; Mar: 12.0%) and fuel lubricants (-26.8%;Mar: 9.0%), reflecting suspension in factory operations.

● Tradebalanceexpandedto a two-monthhigh(USD2.5b;Mar:USD1.6b) as imports declined(-20.8%)more thanexports (-15.4%) on a MoM basis.

● 2020 exportsforecastmaintained (-10.0 to -5.0%; 2019: -2.7%), but with potentially less severe contraction due tothe surge in gold shipments

- Movement restrictions which have yet to be fully lifted in most countries will continue to disrupt the global supply chain.

- Sentiments amongst consumers and businesses may have bottomed out amid the gradual economic reopening, but would still require a longer period to recover, suggesting tepid external demand in the immediate term.

- We expect the BoT to pause on further easing at the next MPC meeting in June, as it suggested that it would monitor the effectiveness of the previously deployed measures and owing to the favourable COVID-19 development domestically

Source: Kenanga Research - 27 May 2020