Thailand, ASEAN and Asian Markets — Morning Briefing

28 October 2026 | Thailand's Exports Surge 24%, Imports Jump 50.4% to Record US$44.30 Billion, Creating a US$5.86 Billion Trade Deficit

Thailand's exports expanded by 24% to US$38.44 billion in September, surpassing analysts' expectations, according to data released by the Commerce Ministry on Monday, 26 October. This remarkable growth is primarily driven by electronics, AI-related demand, and agricultural products. However, imports surged 50.4% to a record US$44.30 billion, resulting in a substantial trade deficit of US$5.86 billion for the month.

For a year-to-date comparison, exports increased by 19.6%, while imports rose by 37.8%, leading to a cumulative trade deficit of US$43.69 billion. Excluding oil, gold, and military goods, Thailand's exports grew by 28.2% in September. Notably, shipments to the United States, Thailand's largest export market, rose by 50.1% year-on-year, whereas exports to China increased by 18.4%.

While the trade deficit underscores the growing gap between export earnings and import spending, it may not necessarily indicate economic weakness. Imports encompass essential components like machinery, electronic parts, raw materials, and energy required for manufacturing and export production. The Commerce Ministry anticipates that Thailand's exports could grow by as much as 19% in 2026, exceeding their earlier forecast.

China's Industrial Profits Surge, but Domestically-Driven Demand Remains Uneven

China's industrial profits grew by 14.4% year-on-year in September, up from 4.2% in August, according to data released by the National Bureau of Statistics on Tuesday, 27 October. This acceleration in profitability highlights the strength of certain manufacturing sectors, particularly those linked to electronics, communications equipment, and international technology investments. For the first nine months of 2026, industrial profits increased by 15.5%, slightly below the 15.7% growth recorded from January to August.

The robust performance of electronics, communications, and other technology-related industries can be traced back to the surging demand for advanced hardware and components. These gains underscore China's pivotal role in global manufacturing supply chains. However, while these gains reflect the thriving technology sector, they do not necessarily imply a widespread improvement in domestic demand or business confidence.

Some industries, such as furniture manufacturing, continue to struggle, facing pressure from intense competition and weak consumer demand. Policymakers in China are grappling with the challenge of balancing export-oriented production, which bolsters industrial activity, against the need to stimulate domestic consumption and address severe competition from other sectors.

Asian Banks Face Pressure Ahead of Quarterly Earnings Amid Higher Bond Yields and Persistent Inflation

Asian-focused banks are grappling with mounting pressure on profitability and capital positions due to volatile bond markets, persistent inflation, and currency fluctuations as they prepare for their third-quarter earnings, according to a report by Reuters published on Monday, 26 October. The US 10-year Treasury yield briefly rose to 5.34% before settling around 5.11%, while Japanese government bond yields added additional pressure to the situation.

Higher long-term bond yields can diminish the market value of banks' assets, leading to potential financial strain. Moreover, persistent inflation and currency movements pose risks to banks' profit margins and capital adequacy. As these factors continue to weigh on the banks' performance, stakeholders will be closely monitoring their earnings reports and assessing the broader implications for the banking sector and regional financial stability.