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UOB's Global Economics & Markets Research report highlights that Thailand's external buffers remain fundamentally sound, but current-account deficits in April–May 2024 have worsened due to rising energy and capital goods imports, despite strong export performance. The report attributes this to increased energy costs and industrial investment, which offset export resilience in sectors like electronics and agriculture.
For markets, the narrowing external cushion could pressure the Thai baht (THB/USD) amid concerns over trade balance sustainability. Traders should monitor Thailand's Q2 GDP data and central bank policy responses, as a weaker baht might attract carry-trade flows. The report also notes that while foreign reserves remain robust, persistent deficits could test investor confidence in the currency.
For Gulf investors, Thailand's export strength offers opportunities in regional trade partnerships, but the current-account vulnerability warrants caution. Key risks include energy price volatility and global demand shifts. Traders should watch the Bank of Thailand's next policy meeting in July and the USD/THB cross for technical support/resistance levels.
