Exports to major markets to shrink

Thai exports to major markets, especially the United States, the European Union and Japan, are forecast to contract by 0.9-2.3 per cent this year as the Commerce Ministry prepares to revise its overall 2009 export projection downward.

It currently predicts overall export growth of up to 3 per cent.

Fifty-six foreign-based Thai trade counsellors met yesterday in Bangkok to revise their export targets for each of the markets under their responsibility.

The meeting was held in response to the worsening global economic recession, which led to a 26.4-per-cent drop in January exports.

While Thai shipments to the US, the EU and Japan will shrink this year, exports to "new" markets are forecast to grow by 3.1-7.2 per cent, albeit significantly less than the 21.2-per-cent growth recorded last year.

Besides the weakened demand in major markets, rising protectionism will also hurt the export sector.

Commerce Minister Porntiva Nakasai said the revised overall export target would be announced today following meetings with private-sector leaders and trade counsellors.

The weakened export picture will directly hit the country's economic growth this year, as exports account for more than 67 per cent of gross domestic product.

The National Economic and Social Development Board on Monday said GDP contracted 4.3 per cent in last year's fourth quarter, which was worse than expected due mainly to weak exports in the final two months.

Surasak Riangkrul, director of the Thai Trade Centre in New York, said exports to the US were now expected to come in at minus 2 per cent this year, against last year's 4.4-per-cent growth.

Shipments to the US market amounted to US$20.27 billion (Bt724 billion) in 2008. The market is ranked the fourth largest for Thailand, after Asean, the EU and Japan.

These four major markets account for a combined 49 per cent of Thai exports.

Surasak said the US economic recession and the "Buy American" campaign to promote its indigenous products had hurt Thai exports.

Banjongjitt Angsusingh, Thai trade representative in London, said the United Kingdom had been hit hard by the sluggish global economy. Export growth to the UK is expected to drop from last year's 5 per cent to 3 per cent this year, for $4.1 billion in value.

Moreover, emerging protectionism, or non-tariff barriers, in the EU will cause more problems for Thai exporters, Porntiva said.

Export growth to the Middle East is expected to drop from the 18 per cent previously estimated to only 10 per cent this year.

The Thai trade representative based in Dubai, Pilun Bhanich-supapol, said the lower export projection resulted from the sharp fall in the price of crude oil since the middle of last year, which had decreased regional incomes and purchasing power.

The property and construction-material businesses in particular have suffered as a result, he said.

Exports to India are expected to show slower growth, from 20 per cent last year to only 10 per cent this year, for $3.7 billion in value.

Exports to China are now projected to grow by only 7 per cent, against 15 per cent in the previous estimate.