Thai exports are forecast to contract for the first time in four years in 2019 amid mounting risk factors such as the global economic slowdown, the ongoing trade row between the US and China, the baht's strength and volatile oil prices.
Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce (UTCC), said the latest study sees exports falling 0.64% to US$251.338 billion this year, compared with a 0.5-1% growth forecast made in May and a 3% growth view in February.
Mr Aat said overall exports in the second half managed to increase 1.6% to $128.37 billion, driven by higher shipments to India and the US.
The Commerce Ministry reported last week that exports in the first six months of the year fell 2.9% from the same period last year to $113 billion. The trade surplus for the period totalled $3.94 billion.
"Apart from those negative factors, new factors such as the European-Vietnam Free Trade Agreement, the uncertainty over Brexit, the dispute between Japan and South Korea, the growing conflict between Iran and the US and UK, and the daily minimum wage hike also warrant close monitoring during the second half of the year," Mr Aat said.
"It will thus be a great challenge to be able to retain flat export growth of 0%. To achieve zero growth, Thailand needs to average 2.9% growth per month in the remaining months of the year."
Mr Aat said that in the worst-case scenario, Thai exports might fall by as little as 1.3% to $252.6 billion under the assumption that the baht value is quoted at 29 baht to the US dollar, crude oil trades at $50 a barrel and the trade dispute escalates to the point that the US raises import tariffs on $325 billion worth of Chinese shipments to the US.
He said the stronger baht will also hit the top export segments: automobiles, electronics, rubber and rubber products, and electric appliances.
The government is being urged to speed up export activities in new export markets such as India, the Middle East and Africa.