Export growth likely to end up at just 4 per cent this year, govt admits

The new unofficial target confirms that Thailand’s economic growth will decelerate, as consumer spending is down and government investment programmes have not kicked off yet. 

A recent poll found that about half of Thais are tightening their belts against the tougher times ahead. The government’s Bt350-billion investment plan for water and flood management has been stalled, while the 2014 budget cannot be disbursed next month as planned.

Deputy Prime Minister Kittiratt Na-Ranong yesterday also expressed concerns over the impact of the delays in the budget and the Bt2-trillion programme to improve transport infrastructure.

The opposition plans to challenge the constitutionality of the Bt2-trillion borrowing bill as well as the fiscal budget. Economists now predict that the first projects under the Bt2-trillion investment scheme will not be launched until next year. 

After a meeting in Bangkok with the Thai trade representatives from 62 overseas posts, Commerce Minister Niwatthumrong Boonsongpaisan said Thai shipments would undeniably miss the growth target of 7-7.5 per cent this year because of the world economic doldrums.

However, the ministry has not yet officially lowered the target for this year. It will next month discuss the matter with exporters and should come up with a clearer export-growth figure.

The ministry has reported that initial estimates show that shipments in the first eight months picked up only 1 per cent year on year. Exports in August alone grew by 4 per cent year on year. It is scheduled to disclose Customs’ export figures for the first eight months on Thursday.

Niwatthumrong said trade globally was slowing down, so inevitably Thai exports would also be affected. However, the ministry will cooperate with the private sector to promote exports aggressively in the rest of the year.

“Exports in the fourth quarter should recover and expand rapidly to serve the festive season. The ministry will lead many trade missions to help Thai exporters penetrate each target market, focusing on those that have been impacted only slightly from the economic slowdown,” he said.

The minister admitted that the export slowdown would brake the economy’s expansion. However, it has not crimped employment, as many industries still need to hire more workers amid the labour shortage.

The International Monetary Fund lowered its forecast for the world’s economic growth from 3.3 per cent in April to 3.1 per cent in July. Developed economies would grow by 5 per cent this year, down from 5.3 per cent. China would grow by 7.8 per cent instead of 8.1 per cent, India by 5.6 per cent instead of 5.8 per cent, Brazil by 2.5 per cent instead of 3 per cent and Asean by 5.6 per cent instead of 5.9 per cent.

The IMF expects the United States to recover slowly at only 1.7 per cent this year. Concerns remain that the US Federal Reserve might taper its quantitative-easing programme in the remaining months of the year.

The Commerce Ministry is also worried about currency fluctuations, as volatility would make it difficult for exporters to quote prices and plan for long-term production.

Despite the 1-per-cent export growth in the first eight months of this year, Payungsak Chartsutipol, chairman of the Federation of Thai Industries, said exports in the fourth quarter should recover and show stronger growth after the baht’s weakening.

Industries that are still performing well include plastics, electronic parts and cosmetics. Shipments this year should grow by 3-4 per cent, he said.