Projected slowdown in global economic growth could hurt Thai exports

Thai export growth could therefore negative this year, making it imperative that the new government seeks new export markets and pursues trade negotiations to support Thai exports.

Danucha Pichayanan the Secretary-General of the National Economic and Social Development Council (NESDB) said the global economic outlook for this year is expected to slow from last year’s 3.4%, as the world's major economies continue to face various pressures including a slowdown in domestic consumption. Inflationary pressures and interest rate hikes are also contributing to this slowdown along with uncertain geopolitical pressures affecting export volumes and global trade.

The NESDB expects global trade to grow by only 2.1% for this year, down from 5.1% last year, and anticipates that Thai exports will contract by about 1% this year (based on the value of exports denominated in U.S. dollars) compared to 4.2% last year.

Most of Thailand's large trading partners are likely to see slowdowns, or are in the post Covid-19 recovery phase, including the United States, which expects its economy to grow by just 0.9%, down from 2.1% last year.

Eurozone countries expect their economies to expand by only 0.5% this year versus 3.5% growth last year. As for China, economic growth of 4.9% is expected, which is an improvement over last year when the country remained under strict Covid-19 lockdown. Meanwhile, the Japanese economy is expected to expand by 1.5% this year, up slightly from 1% last year.

The NESDB Secretary-General said that the global economic recovery, which is still uncertain in many aspects, as well as the slow increase in global trade volumes, has affected Thailand's export sector, which has been negative in recent times. However, solving the problems of Thailand's export sector is an urgent issue that needs to be taken seriously.

It is thus vital that the government focuses on driving the export sector, as well as on accelerating exports to markets that are still growing favourably and creating new markets with high purchasing power, notably in the Middle East,

Another focus must be resolving border trade issues to link CLMV countries (Cambodia, Laos, Myanmar, and Vietnam), which would facilitate exports and imports, increase export volumes and boost opportunities for border trade growth.

Meanwhile, the new Thai government should expedite negotiations on the free trade agreement that is currently in the negotiation stage. This should be done in parallel with a study of trade barrier measures, both tariff measures and non-tariff measures of key trading partners, especially those related to the environment, sanitation, and intellectual property, which will serve as platforms for further trade negotiations.

The government should also pay attention to enhancing the competitiveness of the Thai export sector, by stressing the development of agricultural products to ensure that the quality and standards meet the needs and requirements of the countries importing the Thai goods.

The NESDB also stressed the need to adopt new innovations and advanced technologies to raise productivity and boost the competitiveness of Thai exports.