The 2023 export outlook is growing dimmer, with the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) cutting its export forecast to -1% based on the prospect of a global recession.
The committee's best-case scenario is zero export growth this year.
Earlier this year, the group predicted Thailand's export growth to tally 1-2% in 2023, but with the high rate of inflation, concerns over higher crude oil prices and the ongoing Russia-Ukraine war, it is unlikely the economies of Thailand's trading partners will rebound strongly, eventually affecting Thai exporters, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), a member of the JSCCIB.
Last year, the World Bank warned of a global recession in 2023 after central banks raised interest rates in response to the high rate of inflation.
"The JSCCIB is concerned the global economy will enter a recession, making it difficult for exporters to sell products as usual and causing manufacturers to reduce production," said Mr Kriengkrai.
Similar to Taiwan and South Korea, Thailand is encountering an export slowdown, but the group is upbeat the country will not enter a recession thanks to the recovery in tourism, which is stimulating domestic consumption.
The JSCCIB is maintaining its GDP growth forecast of 3-3.5% for this year. It believes Thailand's inflation rate will hover in a range of 2.7-3.2%.
As the government prepares to hold a general election, authorities must accelerate spending budgets to drive the economy forward before the House is dissolved later this month, said the group.
Concern is mounting that the implementation of some economic policies will slow or grind to a halt when political power changes hands, said the committee.
During the transition period, foreign investors may delay their investment projects as they want to observe the policies of the new administration first, according to the JSCCIB.
"The current government must ensure Thai economic development will continue while we wait for a new government, expected to be formed in August," said Mr Kriengkrai.
Issues such as fluctuations in the exchange rate, expensive energy costs and high interest rates are among the key economic challenges facing the next government.
Visit Limlurcha, vice-chairman of the Thai Chamber of Commerce, said the new government must carry out new measures to increase the country's competitiveness amid these challenges. Tourism will play a key role in supporting the economy, especially as China reopens, said the group.