Stronger baht could hit exports, FTI chief warns

Stronger baht could hit exports, FTI chief warns

The business sector has raised concerns that the strengthening baht will have an adverse impact on Thai exports this year.

Chen Namchaisiri, chairman of the Federation of Thai Industries (FTI), said a stronger baht would cut export value in baht terms and could have a negative impact on the economy.

Businesses are calling for the government to help stabilise the baht, he said at yesterday's meeting of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).

"We are worried about the strengthening baht as the currency is the key factor that will have an impact on the economy," Mr Chen said.

However, the JSCCIB has no plans to revise its 2016 export target of 0-2% growth.

Although the outlook of the Thai and global economies remain weak, the JSCCIB still expects a recovery in the automotive and electronics sectors after seeing good signs in the first quarter.

Mr Chen said the government's infrastructure megaprojects would also stimulate the economy.

"The government has disbursed 31.9% of its budget. It's a good sign for the economy. The business sector believes government investment will help create confidence among investors," he said.

Separately, Nopporn Thepsithar, chairman of the Thai National Shippers' Council, yesterday said the council was maintaining its 2016 export forecast at 0-2% growth despite exports rising for a second straight month in March.

"We see the negative factors that put pressure on exports still outnumber the positive ones," he said. "The International Monetary Fund recently cut its global economic growth forecast to 3.2% this year from 3.4%, while the World Trade Organization has predicted growth in the volume of world trade to remain sluggish at 2.8%, unchanged from 2015."

Mr Nopporn said the global economy was still full of uncertainty.

Thailand's exports rose 1.3% year-on-year in March to US$19.1 billion. In baht terms, shipments surged 10.8% to 677 billion baht, boosted by industrial goods such as cars, machinery and gold.

Exports of industrial products rose 3.4% to $15.4 billion owing to higher shipments of gems and jewellery, which rose 43.8%, and gold, which surged by 263%. Shipments of cars and parts rose 2.9%, mainly on an 80.8% surge of passenger car exports to Australia, Asean and the Middle East.

Exports of agricultural and agribusiness products shrank 1.5% to $2.91 billion, in line with a continued drop in global prices, after edging up 0.4% in February to $2.5 billion. The drop was led by rubber (-21.1%), tapioca (-12.6%) and canned tuna (-7.7%).

For the first three months, shipments rose 0.9% from the same period last year to $53.8 billion, while imports totalled $45.6 billion, a fall of almost 12%. Thailand had a trade surplus of $8.18 billion.

However, excluding the gold factor and special items of hardware for military exercises reported in February, exports for the first quarter actually fell by 4.46%, Mr Nopporn said.

Do you like the content of this article?
COMMENT (3)