Prospects for exports are improving, with the full-year performance expected to contract by not more than 1.5%, says a Thai shipping group.
Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council (TNSC), said with export growth posted in August and September, and shippers indicating continuing orders for the final three months of the year, the council is confident that export performance in 2023 will not contract significantly.
According to the Commerce Ministry’s latest data, exports increased for a second consecutive month in September, up by 2.1% year-on-year to US$25.5 billion, while imports fell by 8.3% to $23.4 billion, resulting in a trade surplus of $2.09 billion.
For the first nine months of the year, exports fell by 3.8% to $213 billion, while imports decreased by 6.0% to $219 billion, resulting in a trade deficit of $5.83 billion.
Mr Chaichan said the conflict in the Middle East has yet to significantly impact exports as it remains confined within a specific geographical area and involves two parties.
The exchange rate is in a range of 35.50-36.50 baht per dollar, remaining favourable for exports, despite high volatility, he said.
According to Mr Chaichan, if exports average $23.8 billion per month for the final three months, it would result in a contraction of 1% for the full year.
However, if the monthly average drops to $23.3 billion, the full-year contraction would total 1.5%.
He said the monthly average is unlikely to fall to $22.8 billion, which would result in a full-year contraction of 2%, as certain goods, such as automobiles, auto components and agricultural products, are faring quite well.
Exports are estimated to increase by up to 7% year-on-year in the final quarter, said Mr Chaichan.
“The TNSC is maintaining the export target for this year at -1.5%, as of November,” he said.
“Major risk factors include global interest rates, which remain high, affecting growth and borrowing costs for businesses; the slow recovery in the purchasing managers’ index [PMI] denting industrial output; and high raw material costs as the price of oil increases and potential war scenarios impact transport costs.”
Regarding next year’s outlook, Mr Chaichan said exports in the coming year are expected to grow at a small rate, at around 0-2%.
“Exports have gradually expanded since August. However, next year’s growth might be limited to around 0-2%,” he said.
“I think the figures may be higher than that, as great opportunities emerge during the crisis.”
Mr Chaichan said the PMI trend is stable for the last six months, signifying that businesses can adapt and survive.
Furthermore, global oil prices remain relatively stable, allowing businesses to manage them, he said.
There are no signs of an export slowdown, nor issues with container shortages, said Mr Chaichan.
“If negative factors persist, such as geopolitical conflicts, a delayed economic recovery among key trading partners, increases in raw material costs, energy prices and interest rates, and the El Niño weather phenomenon, businesses are expected to adapt and swiftly find new markets,” he said.