Thailand's exports are likely to shrink by as much as 13.5% this year, the worst showing in a decade, if a Covid-19 vaccine is not available this year, according to a university study.
Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce, said a vaccine for Covid-19 appears to be the only answer not only for Thailand's economic and trade prospects, but also the world's.
He said the worst-case scenario, meaning no vaccine until next year, sees Thailand's exports contract by up to 13.5% to US$213 billion this year from $246 billion fetched in 2019.
Such a scenario has a 40% likelihood of occurring, said Mr Aat.
The forecast is also based on a global economic contraction of 5%, the baht trading at 31 to the US dollar, a second and third wave of Covid-19, crude oil prices at $40 per barrel, a GDP contraction of 7.7%, and a technology war between the US and China.
"Thailand's exports in the second half of the year are expected to contract more than the first half as the overall economy remains bearish," he said, projecting a decline of up to 19.8% year-on-year.
A tepid global economy, the widespread Covid-19 outbreak with no vaccine, the technology war between the US and China, frenetic currency swings and tightened human rights regulations are factors, said Mr Aat.
Other risk factors in the second half that would affect Thai exports include weaker economies among trade partners, declining import demand, low oil prices and effective lockdown measures.
For the first half, according to the Commerce Ministry's data, Thailand's exports fell 7.1% from the same period last year to $114 billion, while imports dropped 12.6% to $104 billion, resulting in a trade surplus of $10.7 billion.
Mr Aat said the university estimated the Covid-19 crisis will cause a loss in Thai export value of $13.6 to $33.2 billion this year.
The automobile and parts industries are the most affected sectors, followed by electronic appliances, plastic pellets, fuels and chemical products.
However, the crisis is expected to give processed food, beverage and rubber glove sectors promising export opportunities.
He said positive factors remain such as relaxation of lockdown measures in many countries and the relatively weaker baht compared with last year's rates.
Mr Aat warned factors that merit watching are the geopolitical conflicts between China and India as well as the US, China and Hong Kong, as well as the US presidential election in November this year.
He said local operators should adjust their businesses to tap more into the online channel, cost-sharing clusters to reduce production costs, domestic market expansion by using sales campaigns, and labour skill development and packaging improvement.
The government should speed up its aid to the business sector through soft loans to improve machinery and promotion campaigns, both for the domestic and international markets in order to stimulate consumption, said Mr Aat.