Thai exports could be hit next year as the global economy has yet to see clear signs of recovery, economists warn.
Sutapa Amornvivat, chief economist and executive vice-president of Siam Commercial Bank, said clear-cut measures to settle the world's economic slowdown have yet to be seen.
"Interest rate cuts to stimulate economies are unlikely because the rates are now zero in Europe," she said.
The third round of liquidity injection worth US$600 billion by the US under QE3 [quantitative easing] and the Bank of England's asset purchase programme worth $605 billion have also yet to stimulate the world economy and address the European debt crisis, Ms Sutapa said.
Under QE3, the Federal Reserve will buy bonds backed by housing mortgages to lower interest rates and boost the economy.
Ms Sutapa said the European Central Bank's move to buy short-term debts is also unlikely to improve the situation as Spain and Italy are not ready to cut their fiscal budgets for fear of rising unemployment, while a proposed banking union by Europe to address its financial crisis has also yet to be established.
She said tight liquidity in European Union banking would also affect banking operations in Asia as most Asian banks now count on credit lines from EU financial institutions more than from US and Japanese counterparts.
When the banking sector suffers, it would result in drastic fluctuations in the prices of commodities such as oil, gold and steel as the world's cash would flood into the commodities market, Ms Sutapa said.
Thai exports have been feeling the pinch from shrinking consumption in the EU, with shipments to the bloc's 27 members falling 15% in the first nine months of this year to $16.43 billion, representing only 9% of total exports against 10.8% reported at the end of last year.
Vichai Assarassakorn, secretary-general of the Thai Chamber of Commerce, said businesses are very concerned that the EU financial crisis and weak US economy will affect the global economy and exports in the long run.
The Economic and Business Forecasting Centre of the University of the Thai Chamber of Commerce yesterday cut its forecast for the country's export growth this year to only 3.5%, down from 12% in its original forecast. Next year's export growth is projected to be 7.4% to $243.57 billion.
The centre also slashed its economic growth projection for this year to 5.4%, down from 5.6%, due to the impact of the global slowdown.
It projected gross domestic product growth of 4.5% for 2013 on the back of several negative factors, including the global economic slowdown, overseas and domestic political conflicts, and exchange rate fluctuations.
Narongchai Akrasanee, a member of the Monetary Policy Committee, projected that the economy would grow at a rate of 4.6% next year from an estimated 5.7% this year.
He said the export sector is unlikely to drive economic growth as it has in the past given the serious impact from the financial problems in the US, EU and Japan. The impact has already been felt in China.
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Writer: Phusadee Arunmas & Chatrudee Theparat