But the key question is whether export recovery can be sustained in the coming quarters.
Although export’s share of gross domestic product fell from 59 per cent in 2011 to 54 per cent in 2015, it is still the largest engine of the economy, compared with 52 per cent for private consumption, and is five times the 11 per cent from rapidly growing tourism revenue.
From 2001-2012, the Thai economy followed an export-led growth strategy. Export value grew by 12.1 per cent annually and GDP expanded by 4.6 per cent on average. Then global trade experienced a major downturn.
From 2012-2015, global export value shrank by 3.8 per cent per annum. Thailand’s exports fared relatively better, but still contracted 2.2 per cent, with annual GDP growth softening to 2.1 per cent. The export engine had lost its traction.
That engine was restarted, however, in August and September this year, when growth turned positive at 6.5 and 3.4 per cent respectively. The improvement was broad-based, led by automotive products, electrical appliances, and electronics. Agricultural products also saw growth turn positive for the second time in two years, while oil-related items continued to recover in line with energy prices.
At Tisco, we believe the export recovery will be sustained in coming quarters, thanks to a continued rise in commodity prices, which would have two important effects on Thailand’s exports.
First, improving commodity prices will increase purchasing power of Thailand’s trade partners and thus demand for Thailand’s products. Commodity exporters – including Opec members, Brazil, Russia and South Africa, for example – accounted for 18 per cent of Thailand’s exports in 2015. However, they were responsible for 59 per cent of the export decline between 2012 and 2015, when oil and other commodity prices plunged.
As commodity prices have already hit bottom, we expect the income effect to edge up gradually going forward.
Second, around one-fifth of Thailand’s exports are commodity products or linked to oil prices. Therefore, a rise in commodity prices will directly benefit exports through the price effect. In fact, growth of Thailand’s export prices had already turned positive in July, and is still improving.
In a nutshell, we view the second half of 2016 as an inflection point for Thailand’s export-led growth trend.
In terms of overall economic outlook, export improvement will also help cushion against any slowdown in private consumption and tourism during the mourning period. Therefore, we expect economic growth to improve in 2016 to 3.4 per cent, from 2.8 per cent in 2015, and then gradually rise to 3.6 per cent in 2017.

Charnon Boonnuch is senior |economist at Tisco Economic Strategy Unit. He can be reached via |ww.tiscowealth.com or harnon@tisco.co.th.