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Exports will backtrack by 1.6 per cent this year - the worst performance in almost a decade - as the global economy implodes and commodity prices collapse, according to the University of the Thai Chamber of Commerce (UTCC).

Back in 2001, exports dropped dramatically by 6.6 per cent during the "Dot.Com Crisis" when the world economy slumped following the terrorist attack on New York's World Trade Centre on September 11.

Under the most likely scenario, exports would reach only US$173.1 billion (Bt6.1 trillion), in stark contrast with the Commerce Ministry's target of 3-per-cent growth to $184.7 billion this year.

Exports would sink by 10.2 per cent in the first half, before rebounding by 6.9 per cent in the second half following the recovery in target markets.

The university's study showed that, due to lower oil prices, which dragged down prices for agricultural goods, the value of many products would depreciate this year.

The fuel products price index is expected to drop by 25 per cent, while the price index for non-fuel products, including farm goods, feed meal and other raw materials, will likely slip by 23.2 per cent, compared to last year.

Aat Pisanwanich, director of the UTCC's International Trade Studies Centre, said yesterday that the downturn of the global economy would severely sap Thai export growth as consumers in both traditional and new, high-potential export markets tighten their belts.

Exports to traditional markets are expected to drop by 6.2 per cent this year after expanding 10.8 per cent, while exports to new markets will grow only 6.6 per cent instead of 25.4 per cent last year.

"Sagging exports will cause difficulties for many businesses, while unemployment could increase because many industries, particularly hi-tech industries, would face lower orders and that would lead to businesses shutting down," Aat said.

To promote export growth, the government should inject Bt100 billion into the economy, maintain a stable baht - which should track the currency movements of other countries in Asia - solve the liquidity problem for enterprises, and concentrate on roadshows to new markets, he said.

If exports retreated by 1.6 per cent, imports would shrink by 6.7 per cent to $167.2 billion, due to weaker demand for material imports to serve export growth.

The country would in that event this year run a trade surplus of $5.9 billion, but still witness a current-account deficit of $6.28 billion.

In the worst-case scenario of the UTCC study, exports would dive by 6.4 per cent this year and imports would plummet by 10.5 per cent.

In the best-case scenario, which has lowest possibility of occurring, exports would grow by 3.1 per cent to $181.35 billion, based on last year's export expansion of 15.4 per cent to $175 billion.

Chainant Ukosakul, vice chairman of the Thai Chamber of Commerce's committee on trade rules and international trade, said the government must concentrate on solving problem for debtors of the National Credit Bureau to reduce non-performing loans in the system.

The government must maintain a baht weakening policy, aiming for 34-35 per greenback, as that is the best rate to balance export and import growth for the country, he added.