Thai exports surge most in 4 years on AI, China demand

Thailand's exports surged to their fastest pace in over four years in August, driven by electronics and Chinese demand for the country's durians and mangosteens. The Commerce Ministry reported a 24.3% increase in outbound shipments compared to the previous year, marking the strongest growth in 56 months. Meanwhile, imports rose 25.1%, down from a 36.7% increase in July, resulting in a narrowed trade deficit of US$2.5 billion, a significant drop from US$3.6 billion in July.

Electronics, comprising nearly a third of shipments, are expected to continue driving exports as tech companies invest in AI infrastructure. This export growth aligns with the ministry's forecast of a record-breaking year for Thailand's exports. Foreign investment applications hit a record high last year, with projections indicating continued growth in 2026.

Despite the positive outlook, experts warn that exports may face challenges next year due to high oil prices, excess inventory, and front-loaded orders. US tariffs, while posing a temporary hurdle, have also contributed to the surge, with Thai exports to the US increasing by 48.7% in August, driven largely by electronics. However, about 60% of shipments to the US are exempt from the current Section 301 tariff due to the country's status as a major source of this year's growth.

Thailand remains at odds with the US over tariff treatment, currently facing a 12.5% tariff on most exports under Section 301, while seeking parity with Indonesia and Malaysia, who face a lower 10% levy. The dispute over tariff evasion remains a concern, accounting for less than 0.04% of Thailand's total exports to the US.