Shippers fear another year of falling exports

“If the global economy has not recovered and Thai exports still decline until June, the country’s exports for the whole year could see negative growth again,” Nopporn Thepsithar, chairman of the TNSC, said yesterday. 

 The global economy could face an economic crisis like the one in 2008, which would cause global trading to become sluggish.

The risk factors for global trading and Thai shipping are the economic problems in China, the European Union and Japan, currency wars, fluctuating prices of oil and commodities, the United Kingdom leaving the European Union, political conflict in many countries, fear of terrorism, natural disasters and disease, and the refugee problem affecting the economic growth of the EU.

The exchange rate is expected to fluctuate after the likely increase in US interest rates, while China will continue to push for including its currency in the international trading basket. 

The expected range of the baht is 34-36.5 against the US dollar this year.

However, exports in the third and fourth quarters could return to growth, resulting in full-year growth of zero to 2 per cent.

Gross domestic product in April picked up at a gradual pace with the service sector as the main growth engine, according to the “Economic and Monetary Conditions for April 2016” report of the Bank of Thailand.

Manufacturing expanded at a lethargic pace as merchandise exports continued to contract in line with the slowdown in major trading partners’ economies, and domestic purchasing power weakened as a consequence of the drought. 

Private investment has yet to show a clear sign of recovery. Public spending weakened slightly after accelerating in previous periods.

The unemployment rate remained stable from the previous month. The current account registered a surplus thanks to a low level of imports and high tourism receipts.

Tourism continued to be a main growth driver. Foreign arrivals surged 9.8 per cent from the same period last year, partly because of the expansion of international routes by low-cost airlines. 

Manufacturing production slightly improved from the same period last year. 

However, overall production for exports continued to contract in line with the slowdown in the economies of major trading partners such as China and Asean, while some industrials continued to face structural constraints both from domestic factors and changes in the global trade structure. 

Merchandise exports contracted 7.6 per cent from the same period last year. Regarding domestic demand, private consumption indicators were relatively stable from the previous month. 

While spending on non-durable goods improved slightly, households were still cautious in their spending owing partly to fragile consumer confidence and subdued purchasing power.