Exports expected to expand by 8% in 2022 helped by weaker Baht and continued demand for food

Thailand’s exports are expected to continue to remain in positive territory despite the continued slowdown in the global economy with the year’s exports likely to grow by as much as 8%.

The projection for export growth comes after the Thai National Shippers’ Association came out to say that Thailand’s exports for the 8-months ending August this year grew by as much as 11% year-on-year.

“If we can exports around US$ 24.3 billion per month for the remaining 4 months of this year then exports should be able to expand by 8% in 2022,” Chaichan Chareonsuk, Thai National Shippers Association (TNSC) chairman said.

“Exports could expand by more than 8% if the Chinese economy recover and we will have to keep an eye on the Chinese Communist Party (meeting) on October 16 to see whether there will be any changes in their economic policy,” he said.

The yearly projection is based on the assumption that the Baht will be trading around 37-39 Baht per US$ in the 4th quarter of this year, based on the US Federal Reserve’s interest rates hike. The currency was trading at 37.73 Baht per US$ on Tuesday afternoon.

The TNSC also said Thai exports will continue to be supported by the global shortage of food.

exports expected to expand by 8% in 2022 helped by weaker baht and continued demand for food

The council’s export numbers were in line with the commerce ministry’s numbers that came out last week.

The ministry said exports expanded by 7.5% year-on-year to US$ 23.63 billion in August, and 11% year-on-year to US$196.45 billion during the first 8 months of 2022.

Chaichan said the challenges for exports during the last 4 months of 2022 include:

  • High inflation in many trading partner countries
  • US recession
  • Exchange rate
  • High energy prices
  • Increasing electricity price
  • Shortage of raw material such as semi-conductors, steels and grains such as wheat, soybeans, corn, sunflower seeds, wheat flour, animal feed and fertilizer

The TNSC recommended for the government to:

  • Accelerate exports while baht is still weak
  • Maintain the retail price of diesel at 35 Baht per liter until the end of the year
  • Gradually hike the electricity price
  • Streamline transshipment regulations

exports expected to expand by 8% in 2022 helped by weaker baht and continued demand for food