FRIDAY, March 29, 2024
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Strong baht having major impact on exporters, TNSC says

Strong baht having major impact on exporters, TNSC says

The strong Baht severely impacted Thai exports during the first five months of 2019 resulting in losses of up to Bt200 billion, Thai National Shippers' Council (TNSC)'s vice president Visit Limlurcha said on Wednesday.


He estimates that if the baht remains strong until the end of the year, the losses will rise to Bt500 billion. This will directly impact local incomes and purchasing power, with most export businesses likely to reduce staff bonuses. 
“In 2018, the exchange rate averaged Bt32.48 to the US$ but now, the Thai Baht is buying between Bt30.5 and Bt30.6, meaning that exporters are losing an average of Bt2 per US$ or about 6 per cent. Exports that were worth Bt8.15 trillion in 2018 are worth only Bt7.65 trillion at an exchange rate of Bt30.5/US$, so if this continues, they could thus lose up to Bt500 billion on the exchange rate alone,” he said.
Moreover, the strong Baht is not only affecting the export market but is also having an impact on the purchase of properties in the country, with foreign investors having to pay more to buy a residence. 
For example, foreigners buying condominium units priced at Bt10 million last year would have paid about US$307,881. This year, the same priced residence would cost them US$327,439.
“We have seen the number of foreign buyers drop since early this year both as a result of the stronger baht and the global economy,” property experts told The Nation
LPN Development's chief executive and managing director Opas Sripayak said that last year, investors from both China and Europe were buying residential properties in Bangkok, especially condominium units, but that most of them have put decisions to buy on hold because of the increased costs caused by the exchange rate. 
According to the Bank of Thailand reports, in 2018 foreign investors bought condominiums in Thailand worth Bt92 billion, up 29.57 per cent over 2017, which recorded foreign investment in condominiums at Bt71 billion. The top countries who bought condominiums in Thailand are Hong Kong, China, Singapore, Taiwan, Japan, and USA.
However, the Commerce Ministry is maintaining export target growth at three per cent in this year compared with last year, Chutima Bunyapraphasara, the acting commerce minister, said on Wednesday.
She said that trade promotion agencies should focus more on each region of the world, each country and each city, including secondary cities.
For the US market, she suggested the promotions focus on individual industries, especially those that benefit from the trade dispute.
With China, the market focus should be on items with high consumer demand, such as halal products, pet-related goods, health and beauty, and services.
The ministry also focuses on the Asean market and proposes networking with Chinese businesses relocating their production bases to the region in order to support Thai products.
Meanwhile, the Bank of Thailand suggests companies with US$ loans pay them back soon. Manufacturers planning to import raw materials and machinery to restructure their manufacturing plants should note that this is the best time to buy, as the exchange rate works in their favour and they will pay less.

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