Weak and vulnerable exports, including a cloudy outlook for Thai fishery products in Europe, have become a major concern, Prime Minister Prayut Chan-o-cha admitted on Friday.
Speaking on his weekly "Returning Happiness to Thai People" programme, Gen Prayut said his government was monitoring global economic conditions closely, and acknowledged prolonged problems in major trading partners including China and Japan.
The International Monetary Fund has forecast growth of less than 7% for the first time for China and less than 1% in Japan, while Thailand cannot expand trade much more with the United States and Europe, he said.
"It is certain that slowdowns in these countries are affecting our exports. So we must improve exports, find new markets and enhance innovation to be competitive," the prime minister said.
The US dollar value of Thai exports in January contracted by 3.46% year-on-year to US$17.2 billion, the biggest fall since last August.
Exports in 2014 contracted by 0.4% to $228 billion, after a dip of 0.3% in 2013.
The Fiscal Policy Office projects export growth of only 1.4% this year, much lower than the Commerce Ministry's 4% forecast, citing a lack of signs of recovery in the economies of major trade partners.
Gen Prayut noted that exports accounted for as much as 70% of the country's gross domestic product. He has asked officials to try to maintain the country's shares in existing markets, and to do more in "new" markets such as India and Russia.
As well, he said, Thai businesses must seek customers in lower-income and emerging markets because growth potential in more developed markets is limited.
Gen Prayut also said his government was accelerating the development of border economic zones to enable Thailand to export more to neighbouring countries. These countries, being less developed than Thailand, still enjoy low tariffs under the EU Generalised System of Preferences (GSP). Goods made in border economic zones could be exported from the likes of Cambodia to take advantage of lower tariffs.
The EU last year ended GSP tax privileges worth $252 million for Thai products.
Gen Prayut also acknowledged the risk of Thai fishery products being banned by the EU due to its concerns about human trafficking as well as illegal, unreported and unregulated (IUU) fishing.
Cleaning up the fishery industry and ending human trafficking were high on the national agenda and regulations would cover traders, operators, fishery associations, crews and officials, he said.
"Today we have received warnings from several directions. ... We must correct this quickly," he said. "Operators, employees and workers must be regulated. Otherwise, even if we catch seafood or process products, we cannot sell them."
His warning was in direct contrast to the view of Deputy Prime Minister Prawit Wongsuwon, who said earlier on Friday that he felt an EU ban was unlikely.
"I have done my best. I neither deny nor make excuses," said Prime Minister Prayut. "But I would like to explain to international organisations that we work in all dimensions and our intention and determination should be seen. ... We are ready to solve problems and do everything to be recognised because you also demand our products."
The EU has given Thailand until August to comply with its IUU rules and improve labour protection in its fishery industry or face possible sanctions.
Thailand is the world's biggest producer of tuna but the value of its tuna exports to the EU fell 40% last year to 12 billion baht. The EU imposes a 24% tariff on Thai tuna, compared with 12.5% in the US. To make matters worse, the euro has depreciated by nearly 15% against the baht since the start of 2014.
Gen Prayut also said his government was trying to stimulate the economy through more government investment. It includes 40 billion baht for road construction and 180 billion baht for flood-prevention plans.
The prime minister also said that expanded electric commuter railways to link Bangkok with its outskirts would help the government to move slum communities in inner Bangkok areas to better locations along outer tracks.