Exports could grow by 3.88% in 2014 on the back of global economic recovery, if domestic and global conditions allow it, Ath Pisalvanich, director of the International Trade Studies Centre at the University of the Thai Chamber of Commerce (UTCC), said on Tuesday.
He projected exports would contract at a range of 1.5% to 1.9% in the first quarter of the year, with a value of US$55.88-57.82 billion, on the back of a partial recovery of the global economy and the weakening baht, which was likely to reach 35 baht to the US dollar.
This would be a contraction for four straight quarters since the second quarter of 2013, he said.
He expected exports to return to plus figures in the second quarter of the year, boosted by a full recovery in global economies, particularly in the countries which are major trade partners of Thailand, and an improvement in the baht's value.
Mr Ath predicted a 50% possibility that Thailand’s exports could grow by 3.88% in 2014 on the back of global economic recovery.
The baht was projected to rally between 32.07 and 34.24 to the US dollar, with an average value of 33.16 baht in the second quarter, the weakest level in five years, he said.
Mr Ath said there was a 30% possibility that exports for 2014 would expand by as much as 5.6%, if the global economy fully recovers, the baht fluctuation returns to normal and the political turmoil ends in the second quarter.
There was only a 20% possibility that export expansion for the year would be only 2.06%, if there was no global economic recovery at all, as happened in 2013.
He said if the political conflict ends peacefully, exports could grow by 4% in the second, 7% in the third and 10% in the fourth quarters of the year, boosting export growth for 2014 to 4-5%.
The baht's depreciation had not helped exporters as expected, because other currencies in the region were also weakened, he said.
Risk factors that could derail export growth included the rate of global economic recovery, the baht's instability, high inflation rates in developed countries and domestic political turbulence, he said.
Mr Ath said the ongoing anti-government protest could erode the confidence of the country’s trade partners and suggested the government act quickly to restore confidence by ensuring that ordered products would be delivered on time, as agreed, and to avoid impacts on future orders of Thai goods.