Inflation, supply chain constraints to squeeze Thai exports in Q4
Thailand’s exports will contract by 1-3 per cent in the fourth quarter compared to last year due to global inflation and raw material shortage, the Thai National Shippers' Council (TNSC) forecast on Tuesday.
The council estimates that total exports in 2023 will grow marginally by 2-3%.
“Despite several monetary policies having been implemented by the US Federal Reserve, overall inflation is still high worldwide,” said TNSC chairman Chaichan Chareonsuk. “Meanwhile, major manufacturers are suffering from materials shortage, including semiconductors, wheat, soybean, corn, sunflower seeds and fertiliser.”
The TNSC estimated that total exports in November and December would come in at US$23.5 billion and $25 billion, respectively, growing from $21.7 billion in October.
Chaichan said the ongoing stagnation in the global economy will continue until the end of 2023, slowing Thailand’s export sector growth to 2-3%, or an average of $25 billion per month.
The TNSC chief urged the Bank of Thailand to help exporters by maintaining the baht’s stability, and keeping the policy rate at a suitable level to avoid adding to the manufacturing costs in 2023.
He also asked the government to consider adjusting the FT, or fuel adjustment cost for electricity generation, in gradual steps for both household and manufacturing sectors to cushion the impact from rising power bills.
“Next year we want to see more free trade agreements with international partners to maximise opportunities for Thai exporters, such as the European Union, United Kingdom, Turkey, RCEP [Regional Comprehensive Economic Partnership] members and other Asia-Pacific countries,” he added.
Chaichan pointed out that next year exporters should focus on new markets instead of current ones that are becoming saturated. These new potential markets include the Middle East, India and CLMV (Cambodia-Laos-Myanmar-Vietnam).
