Bankers warn US, Europe economic slowdown may tame Thailand's roaring exports

The economists, from Kasikorn Research Centre and TTB Analytics Forecast Centre, were commenting on the country’s export performance in September, which beat expectations.

The Commerce Ministry had reported that September’s exports worth US$24.91 billion (941.4 billion baht) expanded by 7.8 per cent, growing for the 19th consecutive month.

The ministry said that during the first nine months of the year, exports valued at $221.3 billion grew by 10.6 per cent.

Kasikorn Research Centre managing director Chao Kengchon said export growth for September was earlier predicted at only 4-5 per cent, but a much higher growth was recorded.

Chao said the impressive performance was attributed to an easing in inadequate supplies of semiconductors, allowing manufacturers of motorcycles and vehicles to resume production for export.

The easing semiconductor shortage also allowed factories that make computer parts to resume manufacturing for export, he added.

Besides, the weakening baht had made Thai goods more competitive, Chao said.

He noted that September’s economic figures were good because both imports and the trade deficit slowed down to $25.7 billion and $853.2 million, respectively.

But he warned that the clear downtrend of economic growth in the US, the EU and the UK would affect Thailand’s exports in the last three months of the year.

With a slowdown in major economies, high inflation rates and possible interest rate rises posing a serious challenge, Thailand’s export growth might slow to 7-8 per cent this year or 2-3 per cent next year, Chao said.

However, Kasikorn Research Centre expects the trade deficit to slow down in the fourth quarter to end at $16.8 billion as global oil prices are likely to fall.

The centre also expects the current account deficit to drop during the remaining months of the year and it might even turn into a slight surplus next year because of a healthy tourism sector revival, with 10 million foreign arrivals likely this year and 20 million in 2023.

The centre has maintained its economic growth prediction at 2.8 per cent this year and 3 per cent next year, Chao added.

Meanwhile, TTB Analytics Forecast Centre chief Naris Sathapholdeja said that although September’s exports were higher than predictions, exports could slow down during the remaining months of 2022 due to a global economic slowdown.

TTB Analytics predicted that export growth this year would be about 5 per cent.

While Kasikorn saw a downtrend in imports, Naris warned that if imports did not slow down in line with exports, the current account deficit could widen and hurt the country’s economy.

Naris voiced concern that imports continued to expand by two digits, or 15 per cent, in September although it was lower than the predicted 20 per cent.

However, Naris said, the current account received a positive factor from the improving service account thanks to the increase in foreign arrivals.

He said TTB Analytics expected foreign arrivals to reach 10 million this year, which would help bring down the current account deficit to about 1.5 per cent of GDP.

If the number of foreign arrivals next year rises to 15 million, the current account will not see a deficit but reach a balance, Naris said.

However, if the number of foreign arrivals is higher than 15 million, the current account will enjoy a surplus in the second quarter and GDP would expand by 2.8 per cent next year, he added.