UTCC predicts export growth slowdown to 6.8-13.7%
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Thai exports this year will expand at the lowest rate for two years, at between 6.8 per cent and 13.7 per cent, due to the impact of the severe floods and the euro-zone financial crisis, according to a study by the University of the Thai Chamber of Commer
The UTCC forecasts export value will be in a range of US$243 billion to $259 billion (Bt7.7 trillion-Bt8.2 trillion), against projected 2011 growth of 16.9 per cent to $228 billion.
Aat Pisanwanich, director of the UTCC’s International Trade Studies Centre, yesterday said slower global economic growth would lower worldwide demand, denting Thai exports.
The impact of the severe inundation last year will also continue to affect Thai industries and exports this year, he said.
Under the most likely scenario, exports would grow by 13.7 per cent to $259 billion, in stark contrast with the Commerce Ministry's target of 15-per-cent growth.
The assumption is based on the global economy expanding by 3.38 per cent, the European Union by only 0.18 per cent, the US by 1.99 per cent and Japan by 2.03 per cent.
Exports in the current quarter will fall by 6.2 per cent year on year, as many plants have not yet restarted operations following the floods. It is projected that exports will, however, gradually recover in the second quarter, he said.
Moreover, the UTCC study showed that the floating of NGV (natural gas for vehicles) and LPG (liquefied petroleum gas) prices would increase logistics costs for exporters, and thus affect their competitiveness.
Aat added that the government’s policy to raise the daily minimum wage to Bt300 would also affect export competitiveness. Thai labour costs will be much higher than those in key competitor countries, notably China, Indonesia, Vietnam and Cambodia.
Other risk factors to exports are unexpected natural disasters, higher fuel prices and political instability.
In the worst-case scenario of the UTCC study, export growth would fall to between 3.13 and 4.28 per cent if the global economy expanded by just only 0.78-1.38 per cent due to the impact of the financial crunch in the euro zone.
Meanwhile, Deputy Commerce Minister Siriwat Kachornprasart said exports would grow by 15 per cent this year, as the government would have many strategies in place to promote sales to “new” potential markets, especially in Asean and elsewhere in Asia.
The Department of Export Promotion is scheduled to meet with 61 Thai trade officers overseas and the private sector from February 13-15 in order to brainstorm strategies to boost export growth so that the 15-per-cent target is met.
In a bid to increase confidence among traders and enterprises following the flood crisis, Deputy Prime Minister Kittiratt Na-Ranong will also meet some 2,000 Thai and foreign enterprises this Saturday at Siam Niramit Theatre in Bangkok.
Key representatives of a number of agencies will join the conference to explain the government’s flood-prevention and rehabilitation plans to the private sector. These include the Strategic Formulation Committee for Water Resources Management, the Japan International Cooperation Agency, and the ministries of Finance, Commerce, Industry, Agriculture and Transport.
In addition, the Board of Trade will organise a seminar on “Water: friend or enemy A peaceful way to live with it” this Friday to brainstorm ideas to prevent a repeat this year of the devastating floods.
Vichai Assarasakorn, secretary-general of the board, said the seminar would seek measures to prevent further severe flooding in the upcoming raining season, after last year’s inundation resulted in damage of more than Bt1.3 trillion to the economy.
