The Thai National Shippers' Council (TNSC) has trimmed its exports forecast to a range of -0.5% to 1% growth, compared with 0-1% growth previously, based on high uncertainty surrounding major trading partners the US, the EU and China, in addition to relatively high global interest rates.
Chaichan Chareonsuk, chairman of the TNSC, said exports still have to brave several risk factors in the second half, including the slow economic recovery of important trading partners such as the US, Europe and China.
Persistently high global interest rates have led to an economic slowdown and increased borrowing costs for entrepreneurs, resulting in higher production costs for exporters.
Factors such as high electricity bills and expensive raw materials have also adversely affected Thailand's competitiveness in the international market, he said.
The agricultural sector in Thailand faces higher risks from climate change, particularly the impact of El Niño, which could have negative consequences for agricultural exports.
Mr Chaichan said exports are likely to post the last contraction of 2023 in June, before recovering for the remaining months of this year, leading the export performance in the second half to turn positive.
He said despite China's economic recovery being slower than expected, that country's economy still growing.
Emerging export markets such as India and the Middle East hold potential for increased trade of food and agricultural products, including rice and sugar, while purchase orders for electrical appliances and automotive products from Europe and the US should pick up during the festive season.
In a move to stimulate exports in the second half, the TNSC proposed the formation of a new government be expedited to drive continuous export plans and the overall economy.
The council also suggested the new government accelerate the implementation of free trade agreements (FTAs), such as the Thai-Europe FTA and the Thai-UAE FTA.
The TNSC also emphasised the need to reduce production costs, which have increased and could cause Thailand to lose its competitive edge against important trading rivals. This means addressing factors such as electricity costs, labour expenses and interest rates, said Mr Chaichan.
The council promoted strengthening the financial conditions for businesses in the supply chain, particularly small and medium-sized enterprises, through initiatives like supply chain financing. Skill and competence enhancement for the workforce to align with the labour market also need to be revved up, said the TNSC.
According to the latest Commerce Ministry data, the customs-cleared value of exports dipped for the eighth consecutive month in May, falling by 4.6% to US$24.3 billion, while imports decreased by 3.4% to $26.2 billion, resulting in a trade deficit of $1.84 billion.
In the first five months of this year, exports fell by 5.1% year-on-year to $116 billion, while imports dipped by 2.5% to $123 billion, resulting in a trade deficit of $6.36 billion.
