Thai exports in 2024 are likely to rebound to growth of 3.6% from a projected decline of 2% this year, according to the latest forecast by the University of the Thai Chamber of Commerce (UTCC).
UTCC president Thanavath Phonvichai attributed the forecast to easing inflation and lower interest rates among various countries, which should increase demand for goods.
Thai government agencies also plan to enact policies next year to increase exports to various markets, such as leveraging soft power to add value to shipments, addressing border trade barriers, and making greater use of free trade agreements, he said.
"Thai exports are recovering in the fourth quarter of this year, showing gradual and consistent growth. The recovery is expected to become clearer by the middle of 2024, and we believe exports will contribute significantly to the Thai economy next year," said Mr Thanavath.
"Outbound shipments could tally 300 billion baht next year if the sector grows by 3.6% as projected."
He said the major stimulus scheme next year is the planned handout from digital wallets. The UTCC expects the Thai economy to grow by 4.5-5% in 2024.
There are still risks for the export sector next year given the uncertain global economic conditions, said Mr Thanavath.
Both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) predict a slowdown in the global economy in 2024. The IMF forecasts global growth of 2.9% next year, down from 3% this year, while the OECD anticipates growth of 2.7%, down from 3% this year.
Meanwhile, the US economy remains constrained by high interest rates and rising unemployment, whereas China faces challenges stemming from its real estate woes, weak consumer spending, and sluggish private sector confidence, particularly regarding investments.
The baht is expected to strengthen, especially with the US predicted to cut interest rates next year.
Higher income from tourism may also contribute to a stronger baht when compared with trading partners, affecting price competitiveness and increasing the cost of production and prices of goods.
The Israel-Hamas conflict is expected to have a limited impact on Thai exports, Mr Thanavath said.
He did advise monitoring the Russia-Ukraine war, which is expected to persist, as well as the intensifying rivalry between the US and China in terms of trade conditions, technological competition, and supply chain decoupling.
Mr Thanavath projected the Israel-Hamas war to have a minor impact on Thai exports to Israel, ranging from -0.1% to -1.7%.
The UTCC assessed the impact of the conflict in the Middle East on Thai exports given three scenarios.
A prolonged conflict was assessed a 30% likelihood, with the university projecting the impact on export value to be US$370 million, leading to a 0.1% contraction.
If a prolonged conflict results in transport routes closing, assessed at a 10% likelihood, the impact is estimated at $850 million, leading to a 0.3% contraction.
If the conflict spreads across the Middle East, assessed at a 5% likelihood, the impact is estimated at $4.77 billion, leading to a 1.7% contraction, according to the UTCC.