Dr. Aat Pisanwanich, Director of Center for International Trade Studies (CITS) of UTCC, said that total Thai exports this year are expected to reach USD251.338 billion, 0.64% less than last year and the first contraction in four years.
Nonetheless, CITS predicts that Thai outbound shipments in the second half of this year will expand 1.6%, totaling USD128.367 billion, driven largely by the government’s stimulus measures.
To maintain export growth, the value of Thai exports in the remainder of this year must increase at least 2.9% per month, or USD21.664 billion monthly, he added.
Risk factors in the second half include the slowing global economy, an escalating trade war between the US and China, BREXIT, a stronger Baht as well as a possible minimum wage increaseDr. Aat Pisanwanich, Director of Center for International Trade Studies (CITS) of UTCC
He added that every one-percent increase in minimum wage will lower exports by 0.06%. The proposed minimum wage hike to Bt400 per day is a 30% increase and it could lower Thai exports by 1.8% or by USD4.524 billion.
The Thai Baht has also strengthened, reaching Bt31.60 per US dollar in the first half of this year. It is expected to stay at around Bt30-Bt31 per US dollar this year.
With further US rate cut, the Thai Baht may continue to strengthen
If the US Federal Reserve decides to cut the fed funds rates during the meeting this week, the Thai Baht may strengthen further, reducing the competiveness of Thai exportsDr. Aat Pisanwanich, Director of Center for International Trade Studies (CITS) of UTCC
The export items seriously affected by a strong Baht are automotive products, electronic parts, rubber and electrical appliances.
He said that the recently-signed free trade agreement between Vietnam and the European Union may also put Thai exports at disadvantage in the EU market.
If the agreement comes into effect in the second half of this year, Thai exports may suffer to the tune of USD680 million. Exports likely to be affected include textiles and apparel, machinery and parts as well as electronics and parts.
If Washington decides to impose additional tariffs on another USD325 billion worth of Chinese goods, and if Beijing retaliates by imposing tariffs on USD60 billion of the US imports, the trade war will escalate. Based on this scenario, Thai exports in 2019 could possibly shrink by 2.6%, Dr. Aat said.
Thailand’s four challenges : Debt, inequality, plastics and climate change
Thais tended to get into debt faster, for longer and for higher amounts. Indebtedness starts as soon as they begin to work at age 25 and can increase until 56 years old.
Bank of Thailand Governor Veerathai Santiprabhob, in his speech entitled “Formulating for the Future of Corporate Governance”, delivered at the Finance and Beyond National Director Conference 2019 in Bangkok (July 24th), said Thailand faces four challenges that require good governance in businesses to address.(more…)
Exports contracted by -2.1%YOY in June, or -8.7% without Gold
With the exception of military arms and weapons reshipment to the USA in February, Thai exports value has shrunk continuously for the past 8 months, and the first half of 2019 showing a decline of -4.4%YOY.
Thai inflation climbed to 1.24% in March 2019
Core inflation stood at 0.58%YOY, stable from 0.60%YOY in the previous month following stagnated prepared food, housing rent and medical and personal care price index.
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