State upbeat on meeting export target
Winichai downplays impact of strong baht
The Commerce Ministry is maintaining its 2017 export growth target of 5% amid gripes from some quarters in export sector about the stronger baht.
Commerce Vice-Minister Winichai Chaemchaeng said that while the baht continued to rise further against the US dollar, the strengthening of the currency has so far had minimal impact on total Thai exports as other currencies in the region were also heading in the same direction.
The impact of baht's rise on export has been minimised since other countries in Asean region are also facing the same problem with all regional currencies rising against the US dollar.
The baht, which has risen more than 5% so far this year, nudged higher yesterday, continuing its strong performance against the dollar this year which has made it Southeast Asia's best performing currency. The baht was hovering around 33.90 per dollar yesterday.
Speaking at a seminar on "The Strong Baht, How Do SMEs Solve This Problem?", Mr Winichai said Thai export products could still compete well with other neighbouring countries after experiencing a 5.7% rise so far this year worth US$73.3 billion.
"Moreover, the baht is on the rise following the same trend as other currencies in the region," he said. "This means we are competing on the same platform as other countries are also facing the same problem."
Another positive factor that should help support Thai export to grow further in 2017 is the recovering global economy that should increase demand and purchasing power in general.
The assumption of global economic recovery is in line with the World Bank, which has forecast a 3.3% growth in world's GDP this year, while global trade is due to grow by 2.7%.
Moreover, Mr Winichai said, the Commerce Ministry was working closely with the Bank of Thailand and other commercial banks to encourage exporters, particularly small and medium enterprises (SMEs), to use currency hedging in order to reduce risks incurred by baht fluctuation.
However, Ganyaphad Tantipipatpong, chairwoman of the Thai National Shippers' Council, said exporters still fear that the stronger baht will cut Thai exports, expecting the adverse to become clearer in the third quarter of this year.
She said other related government and private agencies which oversee the baht's movement should work together to help stabilise the currency soon to minimise the expected drop in Thai exports.
Moreover, the Export-Import Bank of Thailand (Exim Bank) is expected cut export hedging fee in order to help reduced Thai exporters' burdens.
Vachira Aromdee, Bank of Thailand's deputy governor for financial markets operations, said the Thai exporters should prepare themselves for an increase in volatility of the baht and more fluctuation in other Asian currencies against the greenback as unexpected economic policies of US President Donald Trump could lead to an even weaker US dollar.
In the short term, Ms Vachira said Thai exporters should use currency hedging to prevent themselves from being hurt by the fluctuating baht.
However, Thai exporters should also mull upgrading manufacturing methods and applying new technology and innovations to help increase their competitiveness in the long run, she added.