Chamber highlights three risks in 2nd half

Chamber chairman Isara Vongkusolkit said that the global economic slowdown is the most worrisome issue. The Thai export sector relies on the Chinese and European markets who together account for 21.5 per cent of total exports. The decline in exports will lead to cutbacks in production capacity from 70 per cent to 50 per cent, which in turn will increase the cost per unit.
The trend of rising petroleum price, up to US$103 (Bt3,090) per barrel from $95 per barrel in weeks, is another risk. If the price remains at this level or rises, it will have a huge negative impact on enterprises.
He also sees anxiety about the domestic political situation. The uncertainty is not helpful for trade, investment and employment, he said.
The chamber forecasts this year’s gross domestic product growth at 4-5 per cent. However, Isara expects a revision as the prospects for the Thai economy in the second half is not bright. Domestic demand is likely to see a decline along with the reduction in income.
The private sector wants the government to boost the economy with its mega-projects, particularly the Bt350-billion water-management project and the Bt2-trillion infrastructure programme. Apart from the implementation of the projects, the government should support border trade as the measures can be implemented immediately such as 24-hour border operation.
The currency depreciation, in line with that of neighbouring countries, is a boon for Thai enterprises, he said.
Small and medium enterprises have to be ready for the global and domestic economic slowdown with cost efficiency. The chamber will initiate a project on July 17 to help boost SMEs’ capability, with the vision of keeping up with the change in global economy and self-reliance before business expansion. High-technology devices may help management efficiency.
Effective and efficient book-keeping in sources of capital, labour, utilities, raw materials, interest, transportation, and stock will help SMEs access capital resources.
SMEs should now focus on neighbouring markets. During the economic slowdown, the merchandise may have to be sold at a low price initially until they earn a name in the new markets. The chamber, in cooperation with the Ministry of Commerce, will help the SMEs expand into Asean markets, pairing with local enterprises, particularly in food, automobile and its parts, and electronic devices.
Isara said that the increase in daily wage to Bt300 had increased the production cost of SMEs but they had coped with the pay hike to some degree. He saw an increase in the manufacture of machinery. These days, Thailand can produce various kinds of machinery that the enterprises can utilise with cheaper price, he said.