InfoQuest (August 4, 2021) -- TNSC: Thailand may embrace an export growth of 10 percent if its monthly export reaches 20 billion U.S. dollars, or 7 percent if the pandemic cannot be properly controlled.
According to Mr. Chaichan Charoensuk, Chairman of Thai National Shippers Council (TNSC), Thailand will see its exports rosing by 10 percent this year if the monthly exports exceed 20 billion U.S. dollars in the second half, or by only 7 percent if the COVID-19 pandemic continues to rage.
It remains to be seen whether the baht exchange rate can withstand the coming storms, said Chaichan.
The recovery of export market economies and the weakening of the Thai baht have rendered significant growth in Thailand's exports in the past 4-5 months. Except for rice and sugar, other products will be greeted with export growth.
More than 1,500 enterprises have been hit hard by the surging COVID-19, especially those engaged in the labor-intensive sectors. The pandemic caused a loss of productivity of about 20 percent, resulting in a monthly economic loss of about 60 billion baht.
"The vaccination should be speeded up during the lockdown to curb the pandemic," said Chaichan.
The positive factors driving export growth are as follows:
1. Strong global economic recovery.
1.1 Major trading partners, such as the United States, China, Europe and Japan, see their economies pick up as a result of economic stimulus measures and smooth COVID-19 vaccination.
1.2 The World PMI index remains above 50, mirroring the steady recovery of the manufacturing sector.
2. The Federal Reserve System slowed the pace of tightening monetary policy, making the appreciation of the U.S. dollar under pressure, which leads to the weakening of the exchange rate of the Thai baht against the U.S. dollar, close to 33 baht/1 U.S. dollar.
3. The lifting of the lockdown measures and the continuous decline in the number of global newly confirmed cases, the demand for oil in many countries, especially the United States and Europe, has surged, bringing the crude oil futures price to 70 U.S. dollars per barrel.
The factors hindering exports are as follows:
1. The deteriorating pandemic in Thailand.
1.1 Rising number of newly confirmed cases. The government’s inability to suppress the pandemic may deal a heavy blow to Thailand's economy, especially the export sector.
1.2 Production capacity and product delivery are impaired due to an increasing number of diagnosed cases in factories, causing the export growth forecast to fall from 15 percent to 10 percent. Meanwhile, many SME factories could not adopt the high-cost Bubble & Seal measure.
2. Container supply-demand imbalance, inefficient container turnover, and stubbornly high ocean freight charge.
2.1 The soaring freight volume brings about higher and higher freight rates, especially in Europe and the United States.
2.2 Inefficient port management and delayed delivery of ships aggravate insufficient container supply and low turnover rate.
3. Labor shortage becomes prominent as foreign workers cannot enter Thailand and domestic workers cannot get vaccinated.
4. The limited quantity of materials of production renders higher raw material prices, adversely affecting the automobile and electronics sectors.
TNSC puts forward the following suggestions:
1. Disagree with the implementation of Fully Lockdown, and hope that the government will exempt manufacturing and logistics activities related to import and export.
2. The government should purchase the COVID-19 vaccine to make it available to employees in all sectors.
3. The government should implement central public health measures.
4. Government agencies should realize e-Document management to facilitate applications for import and export licenses/certificates through the National Single Window (NSW) to reduce contact.
Source: InfoQuest, by Tanawat Suayaem/Kasomaporn Kittisit, translated by Xinhua Silk Road
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