Two steps for gains from baht surge
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The Office of Industrial Economics (OIE) will propose two measures to the National Economic and Social Development Board (NESDB) to benefit from the baht appreciation - providing soft loans to operators for machinery purchases to boost manufacturing effic
Somchai Harnhirun, the OIE director-general, said that the office has finalised its relief measures, which would be submitted to the NESDB.
To boost imports of capital goods and machinery for increasing efficiency, soft loans should be provided to operators, he said. Another measure is to promote Thai operators to invest abroad by offering corporate income tax deduction on remittances to Thailand.
To cope with short-term baht volatility, the OIE plans to provide foreign exchange hedging knowledge to small- and medium-sized enterprises and support expansion in the domestic, bordering and neighbouring markets. Operators’ working capital and relaxation in US dollar trade throughout the supply chain in the country should be supported.
In the long run, manufacturing efficiency and higher-value-added innovation should be promoted.
Somchai said that the baht appreciation would give a chance for operators to invest overseas and import capital goods and machinery, particularly from Japan, at lower prices.
According to OIE, Thai exports have been affected from competing countries like Indonesia, China, Vietnam and South Korea, and some have been adversely affected by a 16-per-cent depreciation of the yen and a 3-per-cent appreciation of the baht.
Somchai said that in the first three months, Thai exports of manufacturing goods totalled US$43.09 billion (about Bt1.2 trillion), up 7.04 per cent from the same period last year, while Thai export in baht terms amounted to Bt1.28 trillion, up 3.14 per cent.
The OIE forecast that the baht appreciation had caused losses of Bt55.16 billion for Thai exports in the first quarter of 2013. If the average value of the baht stays at 29 per US dollar in 2013, Thailand’s gross domestic product this year is expected to suffer a loss of Bt52.67 billion.
