Exports set to shrink by 1.6%
- By: PHUSADEE ARUNMAS
- Published: 14/01/2009 at 12:00 AM
- Newspaper section: Business
UTCC blames slump in key markets
Thailand's exports are highly likely to contract by 1.6% this year as the world's financial crisis is taking a heavier toll than expected on the country's traditional key markets.
"Thailand's shipments this year will entirely rely on the world's economy and those of our key markets (the United States, Japan, European Union and Asean)," said Aat Pisanwanich, director of the Centre for International Trade Studies of the University of the Thai Chamber of Commerce (UTCC).
"The world economic growth is estimated at only 0.9% while the economies of our conventional markets such as the United States, European Union and Japan are expected to contract 0.7, 0.5 and 0.2% respectively."
Last year, the world's economy grew 0.5%, while the economies of the US, EU and Japan grew 1.4%, 1.2% and 0.5% respectively. Asean economies, meanwhile, were projected to grow 4.2% compared with 5.2% last year.
The world's trade might also grow at a slower pace, by only 1.8% compared with 4.9% last year.
The key exchange rate is estimated at 35 baht against the US dollar this year compared with 33.3 baht last year while crude oil prices are estimated at US$51.2 per barrel from $99.6 last year.
According to Mr Aat, Thai shipments were estimated at $173.17 billion this year compared with an earlier estimate of $175.92 billion, a 15.4% increase over 2008.
Exports to four conventional markets were expected to fall by 6.2% this year, compared with the growth forecast of 10.8% in 2008.
Exports to secondary markets including Hong Kong, Taiwan, South Korea, Australia and Canada may contract 1.7%, compared with 13.1% growth in 2008.
New markets including Indochina, the Middle East, Africa, South America, Eastern Europe, South Asia and China were expected to grow further by 6.6%, but in a much slower pace from 25.4% growth in 2008.
The shrinking exports would play a key role in bringing down the GDP growth by 0.1 to 1.5 percentage points this year.
"Our export growth of about 3.1% is achievable if the government spends 120-200 billion baht under its economic stimulus plans," he said.
According to the study, without any stimulus measures, the exports were projected to slip by up to 6.4% in the worst-case scenario while imports would contract by 10.5% this year.
Imports this year were projected to contract by 6.7% to $167.258 billion compared with $179.26 billion, mainly because of shrinking exports, sluggish domestic demand and easing oil prices.
Trade balance was estimated at $5.917 billion in surplus compared with a deficit of $3.695 billion a year earlier while current account balance should be $3.695 billion baht in deficit compared with a $948-million surplus.
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