The commerce ministry of Thailand will face difficulties driving the country’s export growth to the targeted 15 percent this year, as shipments in the first four months dropped, not only from the impact of last year’s floods but because of the economic sluggishness in the European Union.
During a meeting of 66 ministry commercial counsellors from overseas in Bangkok yesterday, the International Trade Promotion Department lowered its export-growth target slightly to 14.86 percent, from the previous projection of 15.52 percent, based on an anticipated slowing of shipments to the EU and Russia.
Early this year, the department projected that exports to the 27 countries of the EU would grow by 10 percent. However, it has lowered that to only 5 percent, as Europe’s financial crunch persists. Thai exports to the EU contracted by 15.6 percent during the first four months of the year.
It also lowered the projection for Russia and Eastern Europe from 25 percent expansion to 5 percent. Shipments to Russia dropped by a significant 13.49 percent in the first four months on negative impacts from the EU on that country’s economy. deputy Commerce minister Poom Sarapol admitted that to grow exports by the targeted 15 percent to US$262 billion (8.3 trillion baht) would be a tough task.
Besides global factors, the effects of last year’s flood disaster on Thai industries and farming have lasted longer than expected. Moreover, rising costs of fuel and labour have decreased Thai export competitiveness in some industries.
Duangkamol Jiambutr, executive director of the Thai Trade Centre in Frankfurt, Germany, said the unsettling of the Greek government had continued to affect European consumers’ confidence. A shortage of Thai products due to the flooding last year has also encouraged some German importers to turn to other nations. However, if the EU revises its policies and stimulates spending, the EU economy should gradually recover, growing by 1 percent next year, from flat growth this year.
Adul Chotinisakorn, executive director of the Thai Trade Centre in Mumbai, said the Indian economy had been hit hard by the EU crisis as many European investors had withdrawn their investment.
Thai shipments to India are projected to grow by 20 percent this year, having expanded by 3.2 percent in the first four months.
Thai exports to China are targeted at 20-percent expansion this year, from 1.4-percent growth in the first four months. Phatai Sooksommai, executive director of the Thai Trade Centre in Tokyo, said export of major products, mainly electronic goods, had dropped a lot because of the floods. However, food exports have continued to increase.
Thai shipments to Japan are projected to grow by 10 percent this year, despite 6.9-per-cent contraction in the first four months.
Targeted export growth figures to other major destination include 10 percent in the US, 15 percent in Africa, 20 percent in Asean, 25 percent in Indochina including Myanmar, 15 percent in Latin American, 15 percent in South Korea, 10 percent in Australia and 10 percent in Canada.