A private sector panel predicts that Thai export growth may fall short of its target this year because of challenges from both external and internal factors.
However, the meeting of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) on Wednesday maintained its forecast for export growth in 2024 in a range of 0.5-1.5%.
The lower end of the forecast assumes monthly exports of US$24 billion. However, from January to April, Thai exports fell short of this target, averaging $23.3 billion per month, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).
"If Thai exports reach the minimum value of $24 billion per month for the remaining eight months of the year, we will achieve a growth rate of 0.5% this year," he said.
The escalation of the US-China trade war, geopolitical risks, and a global economic slowdown have significantly increased freight costs, a situation that's expected to persist. At the same time, Thailand's structural problems have weakened its competitiveness and growth prospects.
For the first four months this year, Thailand's total export value tallied $94 billion, lagging Vietnam at $123 billion and Malaysia at $100 billion. In 2023, foreign direct investment in Thailand was $29.7 billion, compared with $82.5 billion in Vietnam and $21.7 billion in Indonesia.
Mr Kriengkrai said Thailand's structural problems, particularly in the manufacturing sector, had led to the closure of about 1,600-1,700 factories since the beginning of the year.
He said the FTI is working on reforming the country's manufacturing industry by developing new industries and products to meet global demand.
The panel maintained its forecast for Thai GDP growth in 2024 of 2.2-2.7% and an inflation rate of 0.5-1%. However, it will continue to monitor the economic situation monthly and adjust the data as required.
Separately, Payong Srivanich, chairman of the Thai Bankers' Association, said after the meeting that the banking sector is facing challenges with deteriorating asset quality amid an uneven economic recovery. Growth rates for special mention loans and non-performing loans have surpassed the overall loan growth rate of the banking sector.
"The debt repayment ability of borrowers, especially those in vulnerable segments, has weakened in line with fragile economic growth. Consequently, banks have increased their rejection rates for loan applications due to the riskier economic environment," he said.
Mr Payong said Thailand's informal economy represents about 48-50% of the country's GDP, hindering some customer segments, particularly small and medium-sized enterprises (SMEs), from accessing bank loans. With the informal economy largely consisting of SMEs, banks lack sufficient information to accurately assess their risk profiles.
The JSCCIB proposed the government implement measures to attract SMEs into the formal economic system. For example, the government should waive corporate taxes for SMEs for a period of 5-7 years to help these businesses transition into the formal economic system, he said.
