Global factors could slow Thai export growth in second half of 2023

Overall exports during the year are expected to expand by 6-7 per cent amid the rising inflation which has pushed up the prices of goods as well as business and transportation costs, Exim Thailand president Rak Vorrakitpokatorn said.

He also announced the launch of “Exim Index”, a business research innovation that presents forward-looking export prospects based on 25 indicators in five dimensions: demand, supply, prices, market sentiment, and the bank's trade finance.

He pointed out that the Exim Index as of June this year was 100.63, down slightly from 100.90 in May.

"This reflected a slowing export trend in line with the declining economic outlook of trade partners, concerns over recession and inflation among consumers and investors, impact on exporters’ costs from global supply chain disruptions, and decelerating expansion of trade finance transactions," he said.

Rak advised Thai entrepreneurs to make adjustments to cope with the rising costs by upgrading their products, production processes and marketing guidelines to meet market trends and the demands of consumers in the new era.

He also advised entrepreneurs to manage risks by diversifying products in various markets and penetrating new frontiers, such as countries under the Regional Comprehensive Economic Partnership.

Rak added that Exim Thailand is fully ready to support Thai entrepreneurs in fighting rising costs and managing risks through the “Hybrid Model: Rejuvenate export amid rising costs, drive investment towards new industries”. The measures include:

• Maintaining the interest rate with the prime rate held at 5.75 per cent per annum to relieve the cost burden on Thai entrepreneurs.
• Exim Export Ready Credit, a new credit facility with a maximum credit line of 5 million baht, minimum interest rate of 4.5 per cent per annum in the first six months, and instalment repayment term not exceeding three years for Thai entrepreneurs to boost liquidity for export and related businesses.
• Financial facilities to support market diversification, upgrading of products in response to global trends with demand for green, digital and health products; domestic and overseas investments, particularly development of infrastructure, and new industries that enhance research and development for Thai goods, such as industries conducive to bio-circular-green economy and S-curve industries.
• Risk management tools for international trade and investment, such as export credit insurance to safeguard against non-payment by foreign buyers, investment insurance, and foreign exchange forward contract services.
• Exim Thailand Pavilion, an online trade channel on world-leading e-commerce platforms.

"This is certainly a testament to our determination in pursuing our role as Thailand Development Bank tasked to perform beyond banking with development of innovations in providing financial and non-financial services," he said.

"We aim to empower Thai entrepreneurs to brave challenges, capture opportunities and deal with emerging risks in the global markets," he added.