Thailand
Thailand: Exports facing slower growth in 2023
Thai exports are expected to grow by 2-5% next year, easing from an expected 8% increase in 2022, according to a trade group.
Chaichan Chareonsuk, president of the Thai National Shippers’ Council, attributed next year’s slow growth to the anticipated economic decline of key trading partners such as China, the US, and the EU.
The forecast was also based on the Thai currency’s moderate weakness of 36-38 baht against the US dollar, global oil prices averaging US$90 per barrel, easing production costs, and a relaxation of semiconductor shortages.
According to Mr Chaichan, Thailand will likely end this year with export growth of 8% or 9% if it maintains its momentum in the final quarter.
“In summary, the volume of Thai exports is unlikely to increase, but export product prices will be higher because of rising costs for production, logistics and raw materials,” he said.
Mr Chaichan said supporting factors for Thai export growth this year included ongoing baht weakness and higher global demand for food, resulting in healthy shipments of chicken and canned seafood to the EU and the UK.
He said the key stumbling blocks for the country’s export prospects included: runaway inflation rates in Thailand’s key trading partners; shrinking manufacturing in the US, Europe, China and South Korea; relatively high energy prices due to the protracted Russia-Ukraine war; and lingering shortages of raw materials and chips.
In a move to boost the country’s exports and attract investments, the shippers urged the Thai government to speed up free-trade agreement talks, notably with the EU and the UK.
The council said the Bank of Thailand should maintain its policy rate at an appropriate level to ensure the smallest impact on recovering businesses and consumers, while responsible government agencies should quickly tackle laws and regulations relating to transshipment to pave the way for Thailand to become an Asean logistics hub.
The Commerce Ministry reported on Oct 26 that the customs-cleared value of the country’s exports continued to expand in September for the 19th consecutive month. Exports grew by 7.8% to US$24.9 billion (888 billion baht), following a 7.5% year-on-year uptick in August and a 4.3% increase in July.
Thai exports in the real sector (excluding gold, oil-related products and weaponry) saw a 9% year-on-year increase in September, easing from a 10.1% rise in August.
Major contributors were the shipments of industrial products, especially automobiles, computers and electronics, driven by the regional rebound in the supply of processor chips and the resulting acceleration in production to compensate for the previous shortage.
In addition, the baht’s depreciation against major currencies and the continuous decline in the Shanghai Containerised Freight Index on Asian routes helped to enhance the competitiveness of Thai exports.
Imports in September increased by 15.6% year-on-year to $25.8 billion, resulting in a trade deficit of $853 million. For the first nine months of 2022, Thai exports expanded by 10.6% to $221 billion, while imports rose by 20.7% to $236 billion, resulting in a trade deficit of copy5 billion.
Source: https://www.bangkokpost.com/business/2427770/exports-facing-slower-growth-in-2023