Export growth target cut from 8% to 3%
US-China trade war and uncertainty in Europe dim outlook, says Somkid
published : 31 May 2019 at 18:51
writer: Phusadee Arunmas
The government has reduced its export growth target to 3% this year from 8% earlier, blaming the global economic slowdown, the deepening trade row between the United States and China and political uncertainties in Europe.
According to Deputy Prime Minister Somkid Jatusripitak, exports are likely to fetch US$260 billion this year, down from $270 billion projected earlier.
“Apart from weak global demand, the ongoing trade war has taken a heavy toll on shipments, particularly of electronics, automobiles, garments, rubber and plastics, which are linked to the US-China supply chains,” he said.
He made the comment after chairing a meeting on Friday with directors of 58 trade offices overseas and business groups including the Thai Chamber of Commerce, Thai National Shippers’ Council (TNSC) and the Federation of Thai Industries.
According to Commerce Ministry data, the dollar value of Thai exports decreased by 1.9% year-on-year to $80.5 billion in the first four months of this year. Import value shrank 1.1% to $80.0 billion, yielding a trade surplus of $550 million.
The ministry said earlier that export trends aligned with global sentiment and the outlook for other Asian countries, making export prospects murky because of the escalating trade war.
The ministry also found the country has lost market share for certain products such as automobiles. For instance, Australia is importing more electric vehicles (EVs) from China and Germany and has reduced imports of petrol-fuelled vehicles. Thailand needs to find new trading partners and rev up the manufacture of EVs, it said.
Mr Somkid said more focus needs to be placed on other potential markets such as India, where economic growth is expected to be as strong as 7% this year.
The Commerce Ministry also needs to work with the Board of Investment and the Tourism Authority of Thailand to promote investment and tourism, stimulating the economy while continuing to provide aid to farmers to upgrade their productivity and product quality.
The development should focus on technology and innovations, while e-commerce will be an important tool to help raise farm product prices, he said.
The government also pledges to help reduce logistics costs and improve the customs process as well as promote the use of local currencies in trading with Cambodia, Laos, Myanmar and Vietnam (CLMV).
“Food, construction, furniture and garment products still have high potential,” said Mr Somkid. “Japan and the CLMV are also important export markets that can help cushion the impact of the ongoing trade row.”
Banjongjitt Angsusingh, director-general of the International Trade Promotion Department, said that to achieve the 3% growth target, export value would have to average $22.45 billion per month in the next eight months. The department will focus on promoting shipments of agricultural products, food and cosmetics.
However, Ghanyapad Tantipipatpong, chairwoman of the TNSC, said a target of $22 billion a month for the rest of the year would be hard to meet, given overall weak global demand.