State-owned Export-Import Bank (Exim) of Thailand cut its export forecast for this year to a range of no growth to a 2% contraction, assuming the coronavirus epidemic and the trade war will ravage the country's outbound shipments.
This year will mark a global rebalancing to mitigate risks on multiple fronts that are affecting economies around the world, said Exim Thailand president Pisit Serewiwattana.
The trade war in particular will pressure international trade this year, said Mr Pisit.
There is global trade volatility as a result of ample liquidity and rapidly changing interest rates and commodity prices, he said. Oil prices, which are low as a result of excess supply, have brought the prices of several goods that move in a similar direction to stay at low levels, said Mr Pisit.
Natural disasters and epidemics could hinder economic activities, especially trade and investment, which are interconnected globally, while persistent conflicts among several countries have dampened business operations, purchasing power and the global economy, he said.
Exim Thailand previously predicted Thailand's exports would grow 2% in 2020.
"Thailand is a small open economy that heavily depends on foreign markets and has low bargaining power. The prevailing current account surplus is unsustainable amid the structural imbalance of international trade," said Mr Pisit.
"Thai exports are mainly volume-driven rather than price-driven because of their low added value. The import of consumer goods dwarfs that of machinery and technology for investment purposes."
Exim has a policy to support Thai exporters and investors with financial tools such as export credit and investment insurance facilities, foreign exchange hedging tools as well as special programmes and packages as short-term relief, he said.
For long-term measures, Exim Thailand has made financial facilities and services available to Thai entrepreneurs that will aid in rebalancing and restructuring Thai exports and imports to increase competitiveness through support for replacement of machinery and product development to add value to Thai products.
Exim Thailand is also gearing up to unveil a representative office in Vietnam this year, said Mr Pisit.
The state-run bank has offices in Myanmar, Laos and Cambodia.