Thailand's exports are forecast to grow by 5% this year, at the low end of a previous forecast of 5-8% growth, thanks to uncertainty over the Russia-Ukraine war, a shortage of raw materials and volatility in their prices, as well as higher labour costs, says a group of Thai shippers.
Chaichan Chareonsuk, chairman of the Thai National Shippers' Council (TNSC), said the group has been closely following and evaluating the impact of the Russia-Ukraine war and the trade and financial sanctions imposed by the United States and European Union, which are expected to greatly impact the global and Thai economies, especially in terms of rising production costs due to higher prices of raw materials and energy.
Purchase orders from Thailand's key trading partners are expected to slow because of the war, he said.
"As long as the fighting remains limited between the two countries and the foreign exchange rate stays stabilised at an average of 33 baht to the [US] dollar, the council expects Thai exports to grow at 5% for the whole year," said Mr Chaichan. "Exports are likely to increase by 8% year-on-year in the first quarter, up from 5% in the earlier projection and by 2% to 4% in the second quarter."
In 2021, Thailand's exports jumped 17.1%.
According to the Commerce Ministry's latest figures, the country's exports rose by 12.2% in the first two months this year to US$44.7 billion, with imports surging 18.7% to $47.1 billion, resulting in a trade deficit of $2.4 billion.
Commerce Minister Jurin Laksanawisit said earlier that the war's impact on Thailand's international trade is likely to be seen clearly in March and April, which deserves close monitoring.
According to Mr Chaichan, the key risk factor for Thailand's overall exports is still the escalating conflict between Russia and Ukraine which directly affects international trade and may result in an interruption in export-orientated production.
Russia is the world's second largest oil producer, accounting for 11% of global production. This will raise logistics and production costs, leading to shortages or price volatility in terms of raw materials such as semiconductors, steel, grains, rare earth, and raw materials used to produce fertilisers.
