University cuts growth forecast for exports 2011
The University of the Thai Chamber of Commerce (UTCC) has cut the forecast for export growth this year by 4.4 percentage points, to 18.5-20 per cent, mainly because of the global economic meltdown and disruptions to the country's supply chain caused by fl
A study by UTCC’s Centre for International Trade Studies showed that the flooding in industrial estates alone would reduce exports by 0.4 per cent this year because supply-chain industries have been hit.
“The flooding impact will be prolonged by at least three to six months because of damage to supply-chain industries, as orders have shifted to Vietnam and other countries,” said the centre’s director, Aat Pisanwanich.
So far, flooding in Rojana and Saha Rattana Nakorn industrial estates has caused losses of Bt51.56 billion, and if the damage spreads to Hi-Tech and Bang Pa-In industrial estates in Ayutthaya, the losses will increase to Bt79.8 billion.
Among the industries that will be hit hardest are radios, televisions and parts, which account for 39.8 per cent of total industrial value in Ayutthaya. Others are automobiles and parts, accounting for 15.6 per cent; food and beverages, 6.7 per cent; machinery, 6.2 per cent; and medical equipment and watches, at 6 per cent of the total in the province.
Aat pointed out that the estimate of losses did not include property and permanent assets, machinery costs, investor confidence, and loss of export opportunity in the next three to six months.
Exports in the first quarter of next year will also be affected by the flooding. The total losses could be Bt300 billion to Bt400 billion or even more.
To relieve the impact of the flooding, Aat suggested that the government waive taxes for affected enterprises and provide soft loans as urgent assistance. It should also delay the implementation of the Bt300 minimum wage by at least a year.
As a long-term strategy to prevent flooding in the future, Aat advised the government to allocate a budget for constructing weirs in every tambon, and integrate management of water flows to ensure their efficient management in both the dry and rainy seasons.
The study found that for every 1-per-cent drop in the economy of the European Union, Thai exports fall by 1.2 per cent.
In every 1-per-cent reduction in the US economy, Thai shipments drop by 1.4 per cent.
Thai exports in the current fourth quarter are expected to grow only 16-21.6 per cent to between US$60.5 billion and $63.4 billion (Bt1.87 trillion to Bt1.96 trillion) because of slowing demand in the global market, while some of the Kingdom’s industries will see reduced efficiency for supplying goods because of the flooding.
