Thailand's May exports rose 10.6% year-on-year, missing Bloomberg consensus expectations of 12.7% and marking a sharp slowdown from April's 23.1% growth, the weakest performance in three months. The decline was primarily attributed to weaker agriculture shipments, which contracted 3.1% year-on-year compared to a 17.9% increase in April, reflecting rising regional competition and tighter import restrictions from Indonesia imposed in late April. However, electronics exports remained resilient, rising 32.5% year-on-year, though this was slower than April's 64.6% surge, marking the eighteenth consecutive month of double-digit growth. Manufacturing exports also stayed firm, increasing 14.4% year-on-year versus 27.5% in April, supported by AI-related demand. Fuel exports rose 24.2% year-on-year, up from 12.0% in April, driven by elevated crude prices [1].
Imports increased 35.1% year-on-year, slightly below Bloomberg consensus of 36.3% and down from April's 45.0%. The May trade deficit narrowed to USD 5.7 billion, compared to the consensus estimate of USD 5.5 billion and April's USD 10 billion deficit [1].
Despite the export miss, the Thai Baht (THB) stabilized, supported by strong portfolio inflows. USD/THB fell 0.2% to 33.35, marking the first decline in seven sessions, as foreign investors recorded net purchases of USD 42.9 billion in bonds and USD 19.8 billion in equities. Thai government bond yields fell across the curve, with the 2-year yield down 1 basis point to 1.12% and the 10-year yield down 4 basis points to 2.03%. The SET index gained 0.7% yesterday. Year-to-date, THB is down 5.5% versus the USD, making it the third-weakest performing Asian currency this year, compared to the average for Asian currencies ex-Japan of -3.2% [1].
The Thai government forecasts exports to grow 8% in 2026 as front-loading fades, indicating a cautious optimism for future trade performance [1].
CONCLUSION
Thailand's export growth slowed in May, missing expectations, but resilient electronics and manufacturing sectors provided some offset. Strong portfolio inflows supported the Thai Baht and local markets, despite the currency's continued underperformance year-to-date. The government's forecast for 2026 suggests moderate optimism for export recovery.