Containers are stacked at Bangkok Port. The value of Thailand’s exports is expected to grow 8% this year.
Thailand's exports should grow by 8% this year if China's economy recovers and the shortage of semiconductors eases, according to the Thai National Shippers' Council (TNSC).
Chaichan Chareonsuk, the TNSC chairman, said on Tuesday the country’s exports for the last four months of this year are likely to see continued growth momentum.
“Despite myriad negative factors, we still believe in Thailand’s export performance in the remaining months of the year,” he said. “Growth is expected to reach 8% this year, the top end of a previous forecast range of 6-8%.”
According to Mr Chaichan, China’s economic recovery, the 20th National Congress of the Chinese Communist Party on Oct 16, which is expected to discuss and calibrate the country’s strategy for the next five years, and the chip shortage are key factors that warrant close monitoring for Thai exports.
If the chip shortage eases, the country’s exports of automobiles, electrical appliances and electronics will definitely increase in the fourth quarter, he said.
Mr Chaichan said demand for food is expected to increase thanks to growing concern over global food insecurity.
The baht’s ongoing depreciation is unlikely to help increase Thailand’s competitiveness much as it happened over the past few months, while the currencies of other countries also weakened, he said.
“The baht’s value during the fourth quarter is expected to average 37-38.50 [to the US dollar], though it could weaken past that level if the US Federal Reserve continuously raises its policy interest rate, strengthening the US dollar,” said Mr Chaichan.
Suparp Suwanpimolkul, a vice-chairman of TNSC, said every time the Fed raises its rates by 75 basis points, the baht weakens by about one baht per US dollar.
Mr Suparp said if the Fed raises its rates again later this year, it is highly likely the baht will trade at 39 to the dollar.
He said other risk factors for export prospects include rising inflation among Thailand’s key trading partners, especially the US, relatively high energy prices because of the protracted Russia-Ukraine conflict, raw material shortages and volatility of their prices, as well as a rise in the domestic fuel tariff.
In the first eight months of 2022, Thailand’s exports expanded by 11% from the same period last year to US$196 billion, while imports rose by 21.4% to $211 billion, resulting in a trade deficit of $14.1 billion.