Thailand
Thailand: UTCC says 7.9% export rise viable
Exports may grow by as much as 7.9% this year if Chinese demand continues, the economies of developed trading partners persist on their recovery path and Thailand succeeds in tapping new markets, says the University of the Thai Chamber of Commerce (UTCC).
Aat Pisanwanich, the director of the UTCC Centre for International Trade Studies, said its research indicated exports will continue growing this year but at a slower pace, with the best-case scenario seeing the Thai economy fetch US$256 billion (8.1 trillion baht), up 7.9% from 2017.
The centre estimated Thailand’s exports grew 10.3% in 2017, earning the country $238 billion.
Positive factors include the growing world economy, the largest US tax reform in 30 years and Thailand’s intellectual property upgrade, which the university said will improve the country’s image and draw more international investment.
Resumed political contact with the EU after more than three years of suspended relations in protest of the military coup in 2014 will also help boost Thailand’s export performance, he said.
Mr Aat said risk factors still exist such as retaliatory measures from the US against countries it has large trade deficits with, especially China.
Thailand’s exports to China will definitely decrease if the latter is negatively affected by any US measures, he said.
The strong baht is another key threat for Thai export prospects this year.
“The baht’s strength is expected to continue weighing on Thailand’s export performance this year,” he said.
“We forecast the baht will average 31.8 to the dollar, moving in a range of 31.1-32.2, the highest gain in five years.”
If the baht becomes the strongest Asian currency, China slows its rubber imports from Thailand and developed trading partners such as the US, Japan, and EU see slower than expected economic growth, Mr Aat said Thai exports may only grow 4% this year to $247 billion.
He laid out a middle-range prediction of 6.3% export growth, totalling some $253 billion.
“Although overall exports will continue growing, it’s notable that Thailand’s market share in China and the US, which are key export destinations, dropped in the first 11 months of last year,” he said.
“Thailand’s share of the Chinese market dropped 2.36% for the period, compared with 2.54% in 2016, while its market share in the US in the first 11 months fell to 1.33%, compared with 1.35% in 2016, as the two countries shifted to buying cheaper products from Vietnam.”
The Commerce Ministry reported in late December that exports rose 13.4% year-on-year in November to $21.4 billion, marking a double-digit rise for the seventh straight month and the highest growth in 58 months.
Imports in November totalled $19.7 billion, up 13.7% year-on-year, yielding a trade surplus of $1.77 billion that month.
For the 11-month period, shipments totalled $217 billion, up 10% year-on-year, as rising demand boosted orders in all export segments.
Solid export growth prompted the Commerce Ministry last month to set an initial 2018 export growth target of 6-6.5% this year, reaching $250 billion.
Source: https://www.bangkokpost.com/business/news/1397046/utcc-says-7-9-export-rise-viable