Baht volatility could mean outlook revisions
Business operators are likely to revise GDP and export projections next month amid concern over the baht's volatility and pressure on shipments.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said the baht's movement has been weak over the past two weeks with a 2.4% drop.
"Before that, the currency appreciated a great deal, but the baht's retreat means that the volatile movement hurts many exporters with their business plans," Mr Supant said after Wednesday's monthly meeting of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).
"The baht's weakness has also been steeper than in neighbouring countries in Southeast Asia because of currency speculation in the region, and the global economy has been suffering from the US-China trade war," he said.
Business operators want the Bank of Thailand to closely monitor the currency's movement, Mr Supant said.
While depreciation is better for exports, the volatility means many exporters have yet to prepare to accommodate the currency's moves, he said.
The JSCCIB reported that the baht gained 3.4% against the US dollar in the first two months from 32.32 as of December.
The baht strengthened to 31.31 against the dollar last month before dipping to 31.88.
The JSCCIB forecasts the country's GDP to grow by 4-4.3% in 2019. The country's inflation rate will stay within the 0.8-1.2% range, the committee said, while the export sector is expected to grow 5-7%.
Mr Supant said the global economy and political tensions such as the Brexit situation, the trade war and many volatile currencies are worrying issues putting pressure on the economy.
"We will set up a new joint committee from the JSCCIB to collect economic and business data and eke out suggestions to propose to the next government in May," he said. "The JSCCIB has a positive outlook on the country's economy following the general election on March 24."
Business operators have high expectations about the full-year implementation of the Eastern Economic Corridor (EEC) scheme that will be carried out by the new regime, as many infrastructure projects have already begun.
"Both the EEC and the general election will increase business and investor confidence," Mr Supant said.