Weak baht contributes to 350 bn baht trade deficit
The private sector has expressed concern at the continued weakness of the baht, which has resulted in Thailand’s trade balance being in deficit for 8 consecutive months to the tune of 350 billion baht.
According to the Thai National Shippers' Council (TNSC)'s chairman Chaichan Chareonsuk, even though Thai exports have benefited from the weakened baht, reducing the prices of Thai products in line with the currency, it has also increased the costs of importing goods and raw materials needed for production. The higher cost of imports from the weak baht impacts the production costs and prices of Thai products, affecting the competitiveness of Thai exports.
In addition, the weak baht affects the import of fuel products, which have begun to increase due to the Israel-Hamas conflict and OPEC’s reduction of crude oil production by 1 million barrels per day. Meanwhile, Thailand's demand for fuel products has increased due to the arrival of the Western winter season, which might lead to an increase in oil prices in the country and affect Thailand's oil and electricity prices. The Thai government recently reduced electricity prices to 3.99 baht per unit but might increase them again in the next billing cycle, impacting production costs and product prices.
"Businesses also face increased burdens from Thailand's policy interest rate, which has increased to 2.50% per year, affecting working capital and liquidity. It might also make accessing capital more challenging. Therefore, entrepreneurs need to manage their businesses carefully and reduce costs as much as possible," Chaichan said.
According to the Customs Department's data, Thailand imported goods worth 10.56 trillion baht in 2022, increasing by 24% from the previous year. Fuel products had the highest import expansion rate at 67% (import value of 2.10 trillion baht). The Russia-Ukraine conflict led to higher global energy prices, while Thailand's imports for the first 8 months of this year totalled 6.73 trillion baht, and exports were 6.37 trillion baht, resulting in a trade deficit of 353 billion baht.
