The university's International Trade Studies Centre pointed yesterday to several economic indicators warning of a slow-down in exports, including appreciation of the baht, the economic slow-down affecting world markets and key trading partners, rising oil prices, tougher trade competition and non-tariff barriers affecting Thai trade.

The centre said it expects the country to enjoy a trade surplus of $2.72 billion this year, lower than last year's $3.1 billion surplus. While exports show slow growth, imports will grow faster than last year. Imports will grow 10.87 per cent to $139.7 billion, after expanding only 7.3 per cent to $126 billion last year.

Centre director Aat Pisanwanich said the strengthening baht would be a key factor in decreasing the value of exports while increasing the value of imports. It will also decrease the competitiveness of Thai products, compared with those of other countries.

The centre's prediction of 9.64-per-cent export growth this year is based on a baht exchange rate of 35.49 to the US dollar.

In its worst-case scenario, calculated on the baht continuing to strengthen to an average of 34.49 to the dollar, exports would grow only 6.2 per cent, resulting in a trade deficit this year of $688 million.

Aat said every Bt1 difference in the exchange rate, making the baht stronger, slashes export growth 3.1 per cent.

He said exports to major markets would also show slowing growth this year. For instance, exports to Japan will grow by 6.47 per cent, compared with 9.06 per cent last year; to the US by 3.89 per cent, after 14.7 per cent last year; to EU countries by 4.1 per cent, after 18.2 per cent last year; and to Asean countries by 7.08 per cent, after 11 per cent last year.

Vietnam, which earlier this year became the 150th member of the World Trade Organisation, is Thailand's main export rival in the US market, Aat said. Thailand will lose $113 million worth of exports to Vietnam, particularly food products like seafood.

Moreover, rising non-tariff barriers imposed by the European Union countries will cause more difficulties for Thai exports of leather goods and textiles.

Aat said restrictions on chemical imports to the EU would cut the market for Thai goods 0.5 per cent.

The Centre of International Trade Studies believes the Japan-Thailand Economic Partnership Agreement signed last week will be responsible for an increase in imports in the second half of the year, contributing to a growth in imports of more than 10 per cent over the entire year.

Japanese manufacturers are expected to invest more in Thailand, leading to an increased need for imported machinery to support the manufacturing sector, Aat said.

Petchanet Pratruangkrai

The Nation