The Thai National Shippers' Council (TNSC) has downgraded its export growth forecast for Thailand to 0-1% because of negative factors in both the US and Chinese economies, which are still highly uncertain, as well as geopolitical conflicts.
However, the group still believes Thailand's exports are unlikely to contract this year.
Chaichan Chareonsuk, chairman of the TNSC, said on Tuesday that the council has adjusted its export growth forecast for the whole year to be between 0-1% to US$286-290 billion, down from the previous forecast of 1-2% growth. This is because Thailand's exports are expected to face important risk factors in 2023, such as the uncertain global economy due to political conflicts affecting all sectors including finance, production, exports, raw materials, and energy.
Additionally, Thailand still faces high production costs, especially for electricity and energy, which fluctuate and affect its competitiveness.
Furthermore, the high level of inventory among trading partners will also lead to a decrease in demand, while the hot weather around the world affects agricultural production, which may result in a lower yield than the seasonal average.
"We've downgraded the country's export forecast due to several negative factors and unpredictable factors in the second half of the year, such as the possibility of a recession in the US economy due to the banking crisis, the uncertain recovery of the Chinese economy, and the ongoing conflict between Russia and Ukraine," Mr Chaichan said. "Nevertheless, we are confident that exports will not be negative and the value will not be lower than the previous year."
To achieve a 1% export growth this year, Thailand's average export values need to be around $24.5 billion per month, with products that can still grow well including food, agricultural and processed products, and automobiles, according to Mr Chaichan.
Mr Chaichan said Thailand's overall export situation in the first half of the year should remain stable due to the global economic slowdown, but export growth may accelerate in the second half.
The council also predicted that export figures in the second quarter of 2022 will be better than the first quarter, but will still contract by 2.7%. However, the second half of the year is expected to return to positive growth, with an expansion of around 0.6% in the third quarter and 12% in the fourth quarter.
Crude oil prices in the global market are expected to be around $80-90 per barrel despite oil cartel Opec's reduction in production capacity, the current lower freight rates, and a more convenient logistics system.
As for the Thai currency, if it stays within the range of 34-35 baht per US dollar, Thai exports are expected to be able to continue, Mr Chaichan said.
In the first quarter, Thailand's exports decreased by 4.5% to $70.3 billion, while imports fell by 0.5% to $73.3 billion, resulting in a trade deficit of $3.04 billion, according to the Commerce Ministry's latest data.
