● Export growth surged to a 3-year high in April (13.1% YoY; consensus: 9.6%; Mar: 8.5%), buoyed by a lower base in the preceding year.

● By product, the surge was underpinned by manufacturing goods and mineral & fuel

- Manufacturing (12.4%; Mar: 8.5%): first double-digit expansion in nearly three years, largely reflecting base effects in the shipments of automotive (52.6%; Mar: 11.7%), electrical equipment (45.2%; Mar: 20.9%) and electronic machine (21.7%; Mar: 13.4%).

- Mineral & fuel (83.8%; Mar: 20.1%): spiked on a lower base in the refined fuel segment (98.9%; Mar: 21.6%) amid a slump in oil prices last year.

● By destination, the higher growth was mainly driven by the advanced economies

- This was led by the EU (50.5%; Mar: 31.3%), offsetting a relatively softer growth in exports to CN (21.9%; Mar: 35.9%).

● Similarly, imports gained on a favourable base effect in April (29.8%; consensus: 25.1%; Mar: 14.1%)

- This was propelled by imports of fuel lubricants (45.6%; Mar: -9.5%).

● Trade surplus narrowed to a two-month low (USD0.2b; Mar: USD0.7b), as exports declined (-11.5%) at a faster pace compared to imports (-9.6%) on a MoM basis.

● 2021 exports forecast range kept unchanged at between 4.0% to 6.0% (2020: -6.0%)

- Export growth will likely continue to record a double-digit expansion in May and June, and normalise afterwards as the base effect fades away. Nonetheless, it will remain supported by stronger economic recovery of major trading partners, technology upcycle and higher global crude oil prices.

- We expect the policy rate to be maintained at 0.50%, as the Bank of Thailand focuses on expediting liquidity distribution to affected SMEs to soften the economic blow from the ongoing third wave of COVID-19 infections.

Exports soared in April, solely reflecting a lower base

Source: Kenanga Research - 27 May 2021