Expert identifies 6 threats to Thailand’s vital export sector

Aat Pisanwanich, who heads the University of the Thai Chamber of Commerce (UTCC)’s Centre for International Trade Studies, listed the risks in descending order of severity as follows:

1. Rising manufacturing costs – from energy prices, wages, and interest rates – that may reduce Thailand’s competitiveness.

2. Competition from Chinese products in the global market, plus the fact that several Chinese companies are establishing factories in Thailand to penetrate the local market.

3. Thai products having lower innovation quality and added value compared with those of competitors.

4. Global economic contraction, especially among trade partners.

5. Expanding geopolitical conflicts.

6. Thailand’s adoption of “green economy” policies is slower than that of competitors.

The export sector (goods and services) accounts for about two-thirds of Thailand’s GDP, according to the World Bank.

Aat urged the government to address these urgent risks as a top priority in safeguarding export expansion.

He advised leveraging monetary policy to keep the baht at a competitive level against foreign currencies, as well as pushing for more free trade agreements with existing and new trade partners.

He also urged moves to ensure sustainable water resources for uninterrupted supply to the manufacturing sector.

Aat forecast global trade this year would likely continue its downward trajectory for a fourth consecutive year, contracting by 8% year on year to a net value of about US$30 trillion.

Meanwhile, the Joint Standing Committee on Commerce, Industry, and Banking predicted that Thailand’s gross domestic product in 2024 will rise 2.8% to 3.3%, with exports growing 2-3% year on year.