Thai exports ‘will return to growth this year’

Following a third consecutive year of contraction, the Commerce Ministry has projected Thai shipments will grow by 5 per cent to US$225 billion (Bt8.12 trillion) this year, while the private sector forecasts growth in the region of 2-4 per cent.

The Thai National Shippers’ Council foresees exports growing 2 per cent, while the University of the Thai Chamber of Commerce’s Economic and Business Forecasting Centre predicts expansion of about 4 per cent.

However, the Bank of Thailand expects export growth to be flat this year, with its forecast taking into account a sharper slowdown in China and other Asian economies, the adverse impact of geopolitical conflicts on global demand and tourist confidence, and a further severe drought in Thailand.

In 2016, according to the International Trade Promotion Department’s outlook, many factors will influence Thai shipments.

Positive factors include the |global economy, which is expected to grow by 3.6 per cent, against 3.1 |per cent last year, while the International Monetary Fund forecasts global trade to expand by 2.4 per cent – following a contraction of |11.2 per cent last year.

The government’s measures to support small and medium-sized enterprises in regard to financing and innovation, the promotion of super-cluster investment and investment in 10 special economic zones, and free-trade agreement policies will also help drive export expansion, the department said.

Malee Choklumlerd, director-general of the agency, said the government would play its part in achieving the goal of deepening Asean integration by broadening relations with neighbouring countries in CLMV (Cambodia, Laos, Myanmar and Vietnam) markets and other Asean countries, which would increase bilateral trade and investment.

The department will also cooperate with the Science and Technology Ministry in the development of innovations for export products, as part of efforts to restructure the manufacturing of exported goods, she said.

In 2016, Thai shipments to many markets are also expected to move back into positive territory, such as to the European Union, with 2.8-per-cent growth predicted by the department; the United States (3 per cent); Latin America (17.2 per cent); Asean (6 per cent), CLMV (13.6 per cent); India (9 per cent); and Australia (10 per cent).

However, shipments to Japan, Russia and Middle East markets are still expected to see some degree of contraction, due to an expected slowdown in those economies.

Exports to the three markets are forecast to drop by 1.5 per cent, 15 per cent and 3 per cent, respectively, she added.

To drive more shipments from this

year onward, the Commerce Ministry has launched a seven-strategy plan covering 2016-21, which will focus on market access and economic cooperation, demand-driven marketing, trade promotion with Cambodia, Laos, Myanmar, Vietnam, China and India, outward-investment promotion, trade in services, innovation-driven enterprises, and value creation, Malee said.

While many products should enjoy better orders from abroad over the next 12 months, there are some notable exceptions, such as the Thai fishery sector, which has a negative image overseas as a result of illegal, unreported and unregulated activities and labour problems.

Rubber-product exporters, meanwhile, have been victims of declining oil prices, and garments and textiles are a sunset industry, with many Thai factories shifting to neighbouring countries, she said.

However, products that will show positive export growth are automobiles and parts, jewellery and ornaments, frozen and processed chicken, electronics, electrical appliances, construction materials, machinery and parts, cosmetics and pharmaceutical products, furniture and parts, and gifts, souvenirs and home decorative items.

Meanwhile, given the growing trend for people to concentrate more on service trading, the government will concentrate export efforts more on services that are seen as the future for Thailand, and income from which will be particularly helpful during a period of sluggish income from the export of goods.

Malee said service businesses would play an increasingly significant role in creating national income, while the export of goods would over time play a reduced role.

The government will, therefore, be more concerned about driving service-business growth in the long run.

Nopporn Thepsithar, chairman of the Thai National Shippers’ Council, said the council’s forecast of Thai shipments growing at least 2 per cent this year was based on an assumption that the baht would average 35-37 per US dollar.

Gem, jewellery exports set to grow

Somchai Phornchindarak, president of the Gems, Jewellery and Precious Metal Confederation of Thailand and former president of the Thai Gems and Jewellery Association, predicted that exports of gems, jewellery and ornaments would continue to grow this year, at a rate of around 5 per cent.

To drive more shipments, he said jewellery enterprises had asked for the government’s help in solving four key problems: a shortage of skilled labour; a lack of support for research and development; a shortage of financial liquidity; and the cost of imported raw materials.

The Federation of Thai Industries, meanwhile, has forecast that auto exports will increase by 3 per cent this year.

"Sales may not grow much, as commodity prices will still be low, curbing economic growth, but exports should still expand, particularly of eco-cars," said Surapong Paisitpattanapong, spokesman of the federation’s Auto Industry Club.