Focus more on agri-industrial products: World Bank
Thailand should move from raw farm goods towards agricultural-industrial products to shield itself from the effects of slowing global trade, a World Bank expert has advised.
Senior economist Kirida Bhaopichitr told a seminar yesterday that the global economic situation had completely changed from the steady, rapid growth witnessed in the past 20-30 years. The trade outlook now is for slower expansion, and the Thai economy will have to adjust to this, she said.
The subject of the seminar was the direction of the Thai agricultural sector under the four G’s: global economy, growth of the economy, green economy, and grass-roots era.
“The countries that used to post high economic growth such as the European nations and the US will turn to lower growth. China, which for long showed double-digit growth, will grow by 7-8 per cent in the near future,” she said.
“China remains a driver of the global economy but the speed of growth is slowing.”
Even though overall Thai exports are witnessing low growth, shipments of agricultural products continue to expand. However, exports should concentrate more on processed food products to ensure sustainable growth, she said.
Thai gross domestic product this year is expected to expand by 4.5-5 per cent. However, the country should focus more on developing its agri-industrial sector to deal with slow global growth. Thailand is unable to avoid the uncertainties due to the state of the world economy, and raw agricultural products will be affected by fierce competition, she warned.
According to the World Bank’s surveys, the outlook is for prices of agricultural products such as rice, cassava, sugar, corn, soybean and rubber gradually to reduce, with shrimp as an exception.
However, the lower prices of fertiliser will help sustain production costs, which will continue to provide Thailand with opportunities as long as China’s economy keeps growing.
The World Bank estimates that the Chinese economy in the next 18 years will surpass that of the United States. The number of middle-income Chinese will be higher, and they will demand quality products. This will be an opportunity for Thailand if it has a strong agri-industrial sector,
Kirida said Thailand should also focus on increasing productivity to boost its ability to compete with countries that have strong labour incentives in their agricultural industry.
“Moreover, the country should look at how to expand the services sector, because this sector has low costs and can help sustain GDP.”
