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Published on January 30, 2008

A number of negative factors such as the rising cost of raw materials, stricter trading measures and the bird-flu epidemic are conspiring to affect growth in these areas, the office said yesterday.

The OIE remains confident that gross domestic product in the industrial sector will expand by about 5.1 per cent to 5.5 per cent this year, similar to the healthy 5.3-per-cent expansion last year.

"Despite slower export growth in some industries, the overall Thai export market will keep expanding at a satisfactory rate," said director-general Atchaka Sribunruang Brimble.

The production of frozen and processed chickens is expected to rise 15.9 per cent, while exports will grow about 5 to 10 per cent, declining from 25 per cent last year.

Problems facing this industry includes the relatively strong baht, bird flu and new trade barriers in the European Union, which is insisting it will not tolerate residue in poultry and meat exports.

She said most Thai poultry products met the required standards, however.

Thje sector has also gained tariff reductions from the Japan-Thailand Economic Partnership Agreement, which took effect last year.

Export growth in the gems and jewellery sector will ease from 46.72 per cent last year to about 10-12 per cent this year because of skyrocketing prices for raw materials such as gold.

The US sub-prime fiasco and local scandals concerning low-grade products are also setbacks to growth.

Last year, exports of gems and jewellery to the United States were worth US$5.38 billion (Bt178 billion), up from $3.67 billion the previous year.

Atchaka said small-and medium-sized operators lacked capital to expand production. They have called for the new government to set up a Gems Bank to help them gain access to cash.

The OIE said growth in the printing sector could fall sharply from a blistering 715 per cent last year to just 19 per cent this year, due to slower orders from abroad.

Higher transport costs and the shortage of raw materials such as pulp also contribute to a more downbeat outlook.

Meanwhile, growth in paper exports should jump 14 per cent this year, higher than the 12-per-cent level achieved in 2007.

Paper and printing firms, however, are far more upbeat about growth prospects.

They expect production to surge 20 per cent, up from minus 0.7 per cent in 2007 and minus 4 per cent in 2006.

Garment exporters also predict a positive year.

The industry expects exports to grow by 10 per cent this year, up from a negative 4.9-per-cent rate last year, thanks to an increase in demand from Asean countries, Atchaka said.

Textile exports, meanwhile, are expected to grow at the same 10-per-cent rate.

Chalida Ekvitthayavechnukul

The Nation