Year's goal of 15% export growth called unlikely

They said best that could be hoped for was 10-per-cent growth, as export value in many key sectors had dropped more than expected. It is more likely that exports will grow by only 7-8 per cent this year.

Exporters proposed three key measures to combat the export slump. First, soft loans are needed to help small and medium-sized enterprises. Second, the government should concentrate on managing the baht exchange rate with an eye on the currency strengths of key export rivals, rather than focusing on developed exporters such as Japan, South Korea and Taiwan, while the Board of Investment Office should act as a facilitator to support Thai investment abroad. Third, measures such as tax incentives and tariff waivers should be promoted among Thai investors who want to transfer their money back to the homeland.

Those proposals will be floated on Saturday (June 30) in Bangkok when exporters and Thai overseas trade counsellors meet with Prime Minister Yingluck Shinawatra to brainstorm on the export slowdown.

Vallop Vitanakorn, vice chairman of the Federation of the Thai Industries, said the European Union’s financial crunch had created a chain of impacts around the globe that made the 15-per-cent export-growth target look unrealistic at this point.

"The EU crisis is more serious than the [2008 US-led] crisis as it gradually drags down countries entering this economic crunch. The highest possible growth of Thai shipments will be only 7-8 per cent this year. To achieve 10-per-cent growth, the government should work hard to support Thai manufacturers."

Vallop said the three proposals agreed yesterday would help drive the country’s export growth and reduce obstacles to business expansion. In particular, the government should set up standard lending criteria for SMEs, as currently they face many conditions for accessing loans from financial institutions.

trade counsellors

He added that exports should no longer be the country’s primary economic engine but Thai investment overseas should be promoted.

Sukij Kongpiyacharn, president of the Thai Garment Manufacturers Association, said Thai exports had lost their competitive edge to many countries, mainly Vietnam and Indonesia, because of higher operating and labour costs. The government should focus on export assistance measures amid market sluggishness in the euro zone.

Meanwhile yesterday, trade counsellors shared their views during a meeting at the Commerce Ministry.

Duangkamol Jiambutr, executive director of the Thai Trade Centre in Frankfurt, Germany, said the euro-zone financial crunch would cause a slowdown in export of certain goods. However, foods still have high demand, as do some jewellery and gold ornaments, as consumers reserve them as assets instead of euros.

Thailand’s export to the EU is forecast to grow by 5 per cent this year as the euro zone starts recovering. It was reported that the Kingdom’s exports dropped by 11.1 per cent in the first five months this year.

Somjin Plengkhum, executive director of the Thai Trade Office in New York, said the euro crisis had affected some of Thailand’s markets. However, export to the United States, which is one of the major markets, has slowly recovered.

The US economy relies heavily on the EU as the United States is the top source of foreign investment in the region, mainly in Germany and Italy. If the EU economy gradually collapses, inevitably the US will be affected, which would in turn have an impact on Thai shipments, she explained.

However, Thai agricultural and food products should not be affected by the economic crunch.

Thailand’s export to US is projected to rise by 10 per cent this year, with reported growth of 3.4 per cent in the first five months year on year.

Kanlayanee Sirikul, executive director of the Thai Trade Office in Moscow, said that although shipments to Russia had dropped by 15 per cent, exports should gradually recover along with the economy of that country. Vladimir Putin, who recently returned to the presidency, has launched a campaign to improve living standards, which will benefit Thai exporters, mainly of consumer products, foods, home decorative items, and fashion.

The euro crunch will have little effect on Russia. In addition, Moscow’s "look east" policy will benefit Asian countries. Thailand’s exports to Russia should grow by 25 per cent this year.

Pakaisakdi Svastisin, executive director of the Thai Trade Centre in Paris, said shipments to the EU should return to growth in the second half of the year after many economic giants continue to steer Europe away from a severe crunch.

The financial woes in Portugal, Italy, Ireland and Greece, the so-called PIIG group of EU members with weak economies, should eventually be brought under control, Pakaisakdi said. Thai exports to major EU markets such as France, Germany, Britain and the Netherlands should still grow on high demand for food.