Thai industries call for government aid to stimulate export growth amid falling rates

Industry leaders are soliciting governmental assistance in a bid to boost export growth, following steady declines observed over a streak of eight months, according to recent insights sourced from the Federation of Thai Industries (FTI). Discussions with 210 executives from 45 sectors of the industry revealed that an overwhelming 80% of respondents were in favour of government initiatives to trim operational costs and thereby enhance competitiveness on the global front.

Montri Mahaplerkpong, the vice-chairman of FTI, expounded on these potential measures, citing the need for reducing electricity and logistics expenses as primary industry concerns, which could serve to stimulate export growth. Receiving approximately half of the votes, the execution of novel free trade agreements stood as the second preferred option. This was closely followed by strategies directed towards the promotion of Thai exports in untapped markets via trade processes such as business matchmaking (41.9%) and negotiations with trade impediments laid by Thailand’s established commerce partners (40%).

Concerns surrounding an increase in power bill expenditures underscored the basis for fears surrounding dips in exporters’ competitiveness. Interestingly, the current power costs stand at 4.7 baht per unit from May 1 to August 31, marking a slight slump compared to the charges levied during the initial four-month cycle. Earlier this year, businesses were charged 5.33 baht per unit, marking a 13% jump from the preceding record of 4.72 baht per unit. Households were levied 4.72 baht per unit in the same timeframe, impacting export growth.

On the export growth front, Asian markets, with ASEAN excluded, took the lion’s share at 36.2%, outpacing ASEAN (27.6%), the European Union (12.4%), and the United States (11.4%). Despite these figures, reports from the Commerce Ministry indicated a downward trend in export growth, evidenced by a response dip for the eighth month in a row, closing at US$24.3 billion for May, reported Bangkok Post.

As the Vice Chairman reported, if Thailand is to match its 2023 export value to that of the preceding year, the monthly value must surpass the US$24 billion benchmark throughout the latter half of the year. He speculated that navigating this tricky scenario could prove an uphill battle, given the global economic slowdown—a consequence of having high rates of inflation and interest in numerous countries—as well as the gradual economic recovery in China. These factors are projected to serve as slowdown catalysts for export growth from Thailand and other nations.

However, as the Permanent Commerce Secretary, Keerati Rushchano pointed out, Thailand’s export outlook is poised for improvement in the second half of the year, propelled by global economic recovery and the stabilisation of conditions amongst its trading partners. As reported, the ministry is strategising for a market expansion into seven regions and specified clusters, targeting food and fruit industries in Yunnan province and Nanning, China. Prep works involved in the ministry’s plan include explorative steps directed towards identifying prospective markets to enhance export growth, such as the Commonwealth of Independent States and neighbouring countries.