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Thailand: Shippers downbeat on 2020 outlook as strong baht lingers
Shippers are painting a gloomy picture of the country’s exports, predicting outbound shipments to contract by as much as 5% this year.
Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers’ Council (TNSC), said the strong baht remains a key risk weighing on export prospects this year, along with drought and the latest US-Iran tensions.
“We [the council] estimate Thai export growth at 0-1% to US$251.25 billion if the baht stays at an average 30.50 to the dollar this year,” Ms Ghanyapad said. “If the baht strengthens to 29, exports are estimated to shrink by 2.8% to $242.99 billion. Exports may shrink by 5% to $237.49 billion if the baht appreciates past 28.50 to the dollar.”
In December, the TNSC predicted that exports, which represent up to 70% of GDP, would grow by 0-1% in 2020 under an exchange rate of 30.50 baht to the dollar.
The group’s prediction was much lower than the forecast of the government’s planning unit, the National Economic and Social Development Council (NESDC).
The state planning unit forecasts exports to recover to growth of 2.3% in 2020 from a projected contraction of 2% in 2019, with annual GDP growth of 2.7-3.7% in 2020 after a predicted 2.6% in 2019.
For the first 11 months last year, Thai exports fell by 2.8% from the same period a year earlier to $227 billion, with imports dropping 5.2% to $218 billion, yielding a surplus of $9 billion.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, the economic planning unit of the Commerce Ministry, said earlier that if Thailand recorded $20 billion worth of exports in December, the country’s full-year exports might come in line with the forecast of the NESDC and other government agencies — a contraction of 2%.
Ms Ghanyapad said reining in the baht is a crucial issue and the Bank of Thailand must speed up tackling the problem to make the baht competitive with the currencies of Thailand’s competitors.
“The Bank of Thailand’s recommendation to capitalise on the strong baht by ramping up imports of raw materials to produce consumer goods in the country is not the right solution now, as overall domestic consumption remains weak while the world economy remains slow,” she said.
According to Ms Ghanyapad, exporters are also concerned about the escalating US-Iran conflict, saying that if the standoff worsens and persists, it will stymie the global economy and Thai exports.
A group of exporters under the TNSC is scheduled to call on the Bank of Thailand on Jan 16 to discuss the baht issue.
Source: https://www.bangkokpost.com/business/1830854/shippers-downbeat-on-2020-outlook-as-strong-baht-lingers