Despite soaring oil prices and rising production costs driven by the Russia-Ukraine war, Finance Minister Arkhom Termpittayapaisith still hopes to see the Thai export sector expand by 10% this year.
Speaking at the annual ordinary meeting of the Thai National Shippers' Council (TNSC) on Wednesday, Mr Arkhom said his double-digit wish is based on robust export growth of 17.1% last year. The Finance Ministry forecasts average 2022 export growth of 3.6%-4%, while the private sector predicts expansion of 5%.
"For the first two months of this year, the country's exports already fetched US$44.7 billion, up 12.2% from the same period last year," he said. "If the private sector can push growth this year to 10% from its original target of 5%, this will further boost the economy."
According to Mr Arkhom, the public and private sectors should team up to reduce export obstacles.
The government sector has pledged to make life easier for exporters in terms of logistics and liquidity issues, he said.
Mr Arkhom said the ministry has already told state banks to speed up loan access for troubled entrepreneurs, especially small and medium-sized enterprises (SMEs), while ordering the Revenue Department to accelerate the sluggish rollout of tax refunds.
Chaichan Chareonsuk, the TNSC president, said achieving export growth of 10% would be very challenging.
He said the export sector still faces volatility, uncertainty, complexity and ambiguity this year as a result of the pandemic, while the Russia-Ukraine war aggravated the situation.
"This year Thai exporters have to closely monitor a myriad of complicated factors that require urgent adjustment, such as the shortage of basic raw materials like fertiliser and feed meal, as well as rising prices of oil and steel," said Mr Chaichan. "Higher logistics costs from delayed transport and container shortages are still persisting this year."
TNSC estimates Thai exports will grow 5% this year if the war does not escalate and a settlement can be reached within three months.
The council recently cut its export growth forecast for the second quarter to zero from 5%, attributed to the war in Ukraine and global financial market volatility following Western sanctions imposed on Russia.
Exports are predicted to grow 7-8% in the first quarter as purchase orders were confirmed in advance.
He said to raise export growth by more than 5%, exporters must utilise more online marketing for global trade as well as expand their markets, especially through trade with Cambodia, Laos, Myanmar and Vietnam.
Given higher freight rates, exporters may have to find other transport options, such as the Laos-China high-speed railway, said Mr Chaichan.
He said Thai SME exporters also need more assistance from the Export-Import Bank of Thailand to help ease their liquidity shortages in the second quarter, particularly those engaged in the agricultural sector because it has been stung by shipment delays and higher costs.
Mr Chaichan said Thai shippers also need proactive strategies to expand into new markets, including Middle Eastern countries such as Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Oman. Exporters need to make the best use of trade privileges offered by existing free trade agreements (FTAs) and deepened partnerships via so-called mini-FTAs, he said.
