Fear for exports as West winces
Calls to stabilise baht, find new markets
Despite their optimistic outlook, concern is growing among both the government and private sector that export growth could decelerate in the second half due to external risks.
The ripple effect of Brexit, uncertainty caused by the economic policies of US President Donald Trump and lower oil prices in the Middle East could all heap pressure on Thai exports later in the year, according to Commerce vice-minister Winichai Chaemchaeng.
This is because they all threaten to undermine purchasing power in three of Thailand's traditional export markets -- the European Union, the US and the Middle East.
Mr Winichai said he expects to see slower exports in the second half but "we remain confident export growth will reach the target of 5% for 2017 as a whole".
Commerce ministry data shows that Thai exports jumped 13.2% year-on-year to US$19.9 billion (676 billion baht) in May, the highest rate in more than four years.
That same month, agricultural and agribusiness exports jumped 17.6% from a year earlier to reach $3.24 billion. They were boosted by higher shipments of rubber, sugar, rice, vegetables and fresh fruit -- particularly durian, the shipments of which soared 159%.
The surge in exports beat the 8.4% growth registered in April to leave overall growth for the first six months at 7.2% year-on-year.
But this is likely to drop considerably for the July-to-December period, Mr Winichai said.
To achieve the goal of 5% growth for the year as a whole, Thai exporters were being encouraged to focus on emerging markets like China, India and Asean member nations, he said. All have relatively fast-growing economies with strong purchasing power.
China accounts for 32% of Thai exports while the 10-member Asean bloc makes up another 60% and the US and EU together share around 7%.
But while demand from China and Asean is tipped to grow, purchasing power in Thailand's traditional export markets in the West is expected to decline in line with their fragile economies and as competition intensifies.
"Switching to these new markets ... would help Thai exporters diversify risk and increase the value of exports to offset falls in the US, EU and Middle East," Mr Winichai said.
Chen Namchaisiri, chairman of the Federation of Thai Industries (FTI), said he expects the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) to revise up its 2017 export target when it meets on July 4, based on the robust May data. It previously forecast growth of 3.5%. He declined to predict what the new figure would be.
Mr Chen said the FTI and JSCCIB remain concerned about the strength of the Thai baht, which has risen 5% this year and is still on an upward trajectory, as this also threatens exports. He demanded the government step in to stabilise the currency.
"The government is duty-bound to seek rescue measures to help exporters, as well as issue some measures to help stabilise the baht," he said.