Thai exports expected to improve in H2
Thai export prospects should improve in the second half of this year as the global economy recovers and conditions are enhanced among trading partners, says the Commerce Ministry.
Permanent commerce secretary Keerati Rushchano said the baht exchange rate remains competitive, while the ministry has plans to ramp up market expansion later this year into seven regions and specific clusters, starting with food and fruit in the province of Yunnan and the city of Nanning in China.
The ministry also wants to explore new potential markets such as the Commonwealth of Independent States and neighbouring countries, said Mr Keerati.
He said the pause in interest rate hikes by the US Federal Reserve could help alleviate pressure on consumer spending and investment. In addition, drought conditions in several countries might create favourable opportunities for Thailand’s agricultural exports, said Mr Keerati.
He admitted there were a number of potential risks that could adversely affect exports, including an economic slowdown in trading partner countries, particularly in the EU, which poses a potential risk of economic downturn; volatile weather conditions, which could impact the number of agricultural products produced in a given year; and pressure from interest rates and exchange rates, which could have an impact on consumer spending and the production sector.
He said other risks included the trade policy directions of key trading partners, particularly China’s self-reliance policy, which might create uncertainties and challenges for Thailand’s exports.
The ministry reported yesterday that the customs-cleared value of exports dipped for an eighth consecutive month in May, falling by 4.6% to US$24.3 billion, while imports decreased by 3.4% to $26.2 billion, resulting in a trade deficit of copy.84 billion.
Thai exports of agricultural and agro-industrial products contracted by 16.3% year-on-year in May to $4.44 billion, while industrial product exports grew 1.5% to copy9.0 billion.
In the first five months of this year, Thai exports fell by 5.1% from the same period of last year to copy16 billion, while imports decreased by 2.5% to copy23 billion, resulting in a trade deficit of $6.36 billion.
Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council, said the export figures for May exceeded forecasts which were initially at about $23.5 billion.
Although Thailand’s exports are still in negative territory, the decline is smaller compared to other countries. With seven months remaining, if exports can reach $24.4 billion per month, the annual target will be 0%.
However, collaboration between the government and the private sector to tap into seven regions and specific clusters in the remaining months is likely to contribute to positive export growth of 1-2% for the year, Mr Chaichan said, adding that the baht’s weakening to 35 baht per US dollar also helps facilitate Thai exports.