Thai exports set for boost from cars, electronics and agriculture
With a forecasted lethargic overall performance in 2023, Thai exports are set to be propelled by automobiles, auto parts, electronics, and agricultural products in the concluding quarter of this year, according to the Federation of Thai Industries (FTI). The FTI anticipates a rising global demand for these products, which should invigorate Thai exports that have been sluggish for several months.
FTI Chairman Kriengkrai Thiennukul, posted a Joint Standing Committee on Commerce, Industry and Banking meeting, statement.
“Exports will contribute to Thai economic growth over the last two months this year.”
Nevertheless, the committee has downgraded its export projection for the year to a contraction of 1-2%, slightly lower than the previous 0.5-2% contraction.
Following a series of declines, Thai exports saw an increase for the second consecutive month in September, rising 2.1% year-on-year to US$25.5 billion. Concurrently, imports took a downturn by 8.3% to US$23.4 billion, leading to a trade surplus of US$2.09 billion, as reported by the Commerce Ministry last week.
This increase in September exports was primarily driven by agricultural and agro-industrial products. Notable growth was observed in the exports of durian and mangosteen to China, as well as rice exports to South Africa and Indonesia. Industrial exports, in line with trends such as solar cells and mobile phones, also continued to expand, reported Bangkok Post.
Middle East conflict
However, the ongoing conflict in the Middle East has raised concern amongst car manufacturers who export to the region, a key market for the Thai automotive industry. Automotive products account for 10% of total Thai exports, as revealed by the FTI. The FTI’s Automotive Industry Club had earlier expressed concerns about a potential decline in pickup exports to the Middle East if the dispute is not resolved via negotiations.
Kriengkrai expressed apprehensions about global crude oil prices potentially spiking to $140-150 per barrel if the conflict intensifies and prolongs.
“The FTI hopes crude oil prices will stay under US$100 a barrel.”
Additionally, Kriengkrai urged the government to implement new measures to boost the Thai economy in the first half of next year, particularly during the Songkran festival.
He also advised the government to improve the long-term energy price structure by reducing the power tariff to 2.3 to 2.7 baht (US$ 0.064 to 0.075) per kilowatt-hour (unit) from the current 3.99 baht (US$ 0.11) per unit. This adjustment would bring it in line with the power tariffs in Indonesia and Vietnam, which stand at 2.3 and 2.7 baht per unit, respectively.
