Thailand
Thailand: 8% export rise eyed for 2019
The government has set a lofty export growth target of 8% for next year, while the private sector believes the increase will be 5% at best, citing negative momentum from the prolonged US-China trade dispute.
Deputy Prime Minister Somkid Jatusripitak, who chaired Thursday’s joint meeting between businesses, Commerce Ministry officials and international commercial counsellors, said the government expects export growth of 8% next year, on a par with this year’s growth rate.
“This year exports are expected to grow 8% to fetch US$256 billion (8.33 trillion baht), according to the Commerce Ministry,” he said. “Next year’s growth target is 8% to $276 billion, though risk factors include a possible global economic slowdown, the escalating trade row between China and the US and higher world oil prices, which will definitely affect domestic production costs.”
Mr Somkid said foreign exchange volatility is another risk factor, as the baht is appreciating.
“Related parties need to work together on similar forms of the Pracha Rat public-private collaboration to prevent damage to exports,” he said. “The public and private sector need to continue working together to evaluate the affected goods to work out preventive measures in advance.”
Mr Somkid cited the recent global economic growth forecasts by the IMF, which cut global economic growth for 2018 and 2019 to 3.7% for both years, down from a July forecast of 3.9% growth for both years. The IMF said the US-China trade spat was taking a toll and emerging markets were struggling with tighter liquidity and capital outflows.
The downgrade reflects a confluence of factors, including the introduction of import tariffs between the US and China, weaker performances within the euro zone, Britain and Japan, and rising interest rates that are pressuring emerging markets with capital outflows, notably Argentina, Brazil, Turkey, South Africa, Indonesia and Mexico.
With much of the impact from the US-China trade row expected to be felt next year, the IMF cut its 2019 US growth forecast to 2.5% from 2.7% previously, and lowered China’s 2019 growth forecast to 6.2% from 6.4%. This year’s growth forecasts for the two countries were unchanged at 2.9% for the US and 6.6% for China.
Commerce Minister Sontirat Sontijirawong said Thailand needs to seek more new markets to offset the negative impact from the trade war and also tap e-commerce.
Visit Limlurcha, vice-chairman of the Thai National Shippers’ Council, said the 8% growth target for 2019 is quite challenging given the trade war and the world’s slower economic outlook.
“A war room to oversee the export sector needs to be established to help exporters cope with the anticipated proliferation of international trade measures like the increase of import tariffs,” he said. “Some 64 Thai Trade Center offices worldwide should also provide more in-depth information and advice to the private sector about how to adjust their exports in keeping with changing environments.”
Apart from the trade war, Mr Visit also expressed concern about the uptrend of the world’s oil prices, saying higher oil prices will affect domestic production costs.
He said Thailand will have a greater trade opportunity with oil-exporting countries once the latter group’s economies recover in the light of higher oil sales.
Montri Mahapreukpong, vice-chairman of the Federation of Thai Industries (FTI), said the agency forecasts the country’s exports to grow at a slower pace in 2019 than this year’s rate.
The FTI predicts next year’s exports to grow by 4-5%, compared with 8-10% growth forecast for this year.
“Overall exports in the year to come are expected to see negative momentum from the prolonged trade war between the US and China,” Mr Montri said.
“Earlier the private sector was hopeful that Thailand was likely to gain some benefits from the trade war, but the situation has not turned out as expected, with the trade war creating widespread negative impact to all countries that have a trade surplus with the US.”
The FTI is calling on the government to speed up settling new free-trade agreements with potential countries to help offset the trade war, Mr Montri said.
Source: https://www.bangkokpost.com/business/news/1560506/8-export-rise-eyed-for-2019