InfoQuest, (February 13, 2020) -- Thailand is expected to resume its export growth in 2020. The latest export figures for December 2019 showed a contraction of 1.3 percent, but excluding oil and gold exports rose by 1.2 percent, which was a good sign showing that the country's exports begun to recover and are heading for the better, according to Ms. Pimchanok Wonkornphon, director general of the Office of Trade Policy and Strategy (OTP).
The major supporting factors include the global economic recovery. The International Monetary Fund (IMF) forecasts global growth to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020.
And production activity in several sectors shows signs that world trade is bottoming out. Many countries and regions, such as the U.S., the EU and Japan, have adopted loose monetary policies to drive steady economic growth.
As the global economy recovers, commodity prices are showing a recovery trend and oil prices are rising. The U.S. and China have signed the phase-1 deal, which eased the trade war between them.
Meanwhile, the Brexit is now clear and the transition period which will last until the end of 2020 is not expected to weigh on Thai enterprises. In addition, the Thai baht began to depreciate, with an average exchange rate of 30.44 against the U.S. dollar in January 2020, the first depreciation in nine months.
Regarding the outbreak of the novel coronavirus (2019-cov) in China, the office did not think it will affect Thailand's exports in the short term, especially for high-value food products in China's market, where demand for safe and high-quality Thai food is sustainable. However, the situation must be closely monitored to prevent regional trade disruptions.
Speaking of the 573 items affected by the Generalized System of Preferences (GSP) suspension implemented by the U.S., Ms. Pimchanok stressed that the Ministry of Commerce is fully cooperating with relevant agencies and developing measures to respond to various situations to minimize the impact on Thai exporters.
The Department of Foreign Trade under the Ministry of Commerce has developed a response plan for the victim industries. In terms of stabilizing market, the Department of International Trade Promotion under the Ministry of Commerce plans to organize government and private sector delegations to explore target markets in more than 18 countries.
This is an important marketing strategy based on the policy proposed by Deputy Prime Minister and Commerce Minister Jurin Laksanawisit, aiming to develop new potential markets while maintaining existing markets and to spread the likely risks as a result of trade measures that different countries take.
The important destinations include China, Japan, India, Bangladesh and CLMV countries (Cambodia, Laos, Myanmar and Vietnam) in Asia; France, Britain and Russia in Europe; the Republic of South Africa in Africa; the Kingdom of Bahrain in the Middle East; Australia and New Zealand in the Oceania.
In terms of single market, Ms. Pimchanok noted that exports to key markets improved significantly in the second half of 2019, and exports to several markets increased in December 2019, with exports to the U.S. and China up 15.6 percent and 7.3 percent, respectively, the highest growth rates in 10 months and 18 months.
In addition, exports to the Middle East and Russia and Commonwealth of Independent States (CIS) rose by 11.4 percent and 8.0 percent, respectively, the highest growth rates in 23 months and 16 months. Exports to CLMV countries grew by 1.1 percent, the first increase in eight months. The improvement in exports to key markets suggests that Thailand's exports have bottomed out and are expected to maintain a sustained recovery in 2020.
An analysis by the office found that Thailand should expedite the exports of a number of products to recover the country's export growth in 2020. Of these, more than 30 kinds of agricultural produce and food, and industrial products have set export records in the face of a slowdown in global trade in 2019 and are expected to continue growing this year.
The exports of industrial products accounted for about 25 percent of the total with a growth rate of more than 13 percent.
The record exports of these items demonstrate the capability of Thai enterprise to make self-adjustment and develop products to meet market demand. Agricultural produce and food include fresh, refrigerated, frozen and dried fruits, refrigerated and frozen chicken, milk and dairy products, wheat products and other instant food, beverages, food seasonings, and pet food.
While industrial products include radio transmitters, fax machines, telephones, watches and components, motorcycles and components, cosmetics, soaps and skin care products, fabrics, and tableware.
Ms. Pimchanok said that apart from exploring export markets and promoting the export of competitive products, accelerating negotiations on free trade agreements (FTAs) to bring down tariffs on exports and addressing non-tariff trade barriers and non-tariff measures in target markets was another important task to promote future exports.
Relevant departments under the Ministry of Commence are working with the private sector, while enterprises, for their part, should focus on maintaining product and packaging standards to ensure that Thai products remain export edges.
Source: InfoQuest, by Kasamaporn Kittisamphan / Ratchada / Sasithorn, translated by Xinhua Silk Road
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