The Thai export sector faces a spate of challenges in 2023, with a trade group forecasting that shipments may decline by as much as 7.4% in the first half of the year.
Chaichan Chareonsuk, chairman of the Thai National Shippers' Council (TNSC), said yesterday that it expects Thai exports to contract by up to 10% year-on-year in the first quarter, partially attributed to high growth in the first quarter of 2022.
The export sector may not recover in the second quarter of 2023 and contract by about 5%, before rebounding by 1.8% and 12% in the third and fourth quarters, respectively.
"Thai export value for the first half of the year is expected to be US$138 billion, with a contraction of 7.4%. However, the export sector may grow by 7-9% in the second half, depending on the economic situation and the recovery of major trading partners such as China, the US, and the European Union. Overall, Thailand's exports are expected to grow by 0% to 1% throughout the year," said Mr Chaichan.
He said that if the situation does not worsen, and if factors such as oil prices, inflation and exchange rates can be managed well, there is still a chance for the export sector to recover in the second half of the year.
However, Mr Chaichan recommended a close monitoring of factors such as oil prices, US inflation, and the recovery of the Chinese economy, which may become clearer around May or June.
He said important export products that can still grow include the food industry, cars and auto parts.
The Commerce Ministry reported on March 30 that the customs-cleared value of exports dipped for the fifth month in a row in February, falling 4.7% year-on-year to $22.4 billion, while imports increased by 1.1% to $23.5 billion, resulting in a trade deficit of $1.11 billion.
The council still expects Thailand's export growth to be 1-2% in 2023, with key risk factors including the global economic slowdown, volatility in the financial and capital markets, geopolitical conflicts, the world's political and economic polarisation, trade and technology wars, trade barriers, and the fluctuation of global energy prices due to international political conflicts.
The lack of flexibility in financial institutions in the US and Europe is another concern.
If this contagion were to spread, it could lead to a higher risk of a global economic recession, which could result in decreased consumer confidence and purchasing power, leading to a continuous reduction in imports, said Mr Chaichan.
