Pressures played down as private sector sticks with 9% export growth
VOLATILITY in the baht and the flare-ups of trade wars have been dismissed by corporate Thailand as diverting the export sector from expectations of at least 9 per cent growth for the year.
The private sector is encouraged by the rising shipments of agricultural and manufacturing products, despite the baht movements, trade conflicts and a trend for rising interest rates in parts of the world.
After a meeting of the Pracha Rat working group on the promotion of trade, service and overseas investment (D4) with over 40 export-related state and private units, Commerce Minister Sontirat Sontijirawong said the private sector has forecasted this year’s export growth at 9 per cent to about US$250 billion, based on the continuous growth in many industries.
Shipments of manufacturing products are expected to climb 11 per cent while exports of agricultural and agro-processing products are estimated to rise by 5 per cent this year.
However, private-sector concerns exist with the US-China trade war and further trade retaliations from other countries. They also suggested that measures to curb excessive volatility of the baht should be implemented and the Thai policy rate should be maintained.
“It’s good news that (Thai) exporters will continue to expand shipments in the latter half of this year with growth estimated at 9 per cent,” Sontirat said.
The Ministry of Commerce has maintained its forecast for this year’s export growth at 8 per cent and the figure will be reviewed in October.
Currently, the prices of agricultural products are highly volatile due to from natural disasters and increases in global production, Sontirat said.
Thai sugar exports, with its current price at 11-year low, is still rising. Total export this year is expected to inch higher by 0-2 per cent to $2.6 billion, he said.
Shipments of rice are projected to advance by 8 per cent to $5.6 billion while exports of food products are estimated to surge by 10 per cent to $20.2 billion.
Exports of tapioca products are expected to edge up slightly by 2 per cent to $2.85 billion this year due to low production. However, rubber export is expected to fall by 10 per cent to $5.45 billion due to falling global price.
Among manufacturing products, shipments of electronics products are expected to surge by 12 per cent to $41.2 billion, automobiles and parts by 18 per cent to $40.5 billion, electrical appliances by 6 per cent to $25 billion and plastic pellets by 12 per cent to $14.2 billion.
Sanan Angubolkul, vice chairman of Board of Trade of Thailand and head of the private sector in D4, said that purchase orders have continued to come in the latter half of this year but the figure may not be as high as that in the first half due to last year’s high base in export value.
In the second half of this year, Thai export is forecast to grow 7 per cent with estimated rises of 9 per cent in manufacturing products and 5 per cent in agricultural/agro-processing products. Combined the estimated growth in the latter half with an 11 per cent increase in Thai export in the first half, it is possible to see export growth of 9 per cent to $257.95 billion.
The private sector remains concerned and wants the authorities to leave the policy rate unchanged so that the baht will not be affected, while no short-term impact has been seen yet from the US-China trade war, he said.
He declined to forecast next year’s Thai export due to uncertainties, particularly US President Donald Trump’s policies and trade retaliations of major economic powers extending from the United States, China, Europe and Asean.