Thailand will barely compete in the international trade arena because enterpreneurs currently cannot control production costs due to higher energy bills and wages than those in China, said Kriengkrai Thiennukul, chairman of the FTI.
“The Chinese are seeking markets for their products. The country will increase exports after its reopening in order to boost the economy,” said Mr Kriengkrai.
With the global economy likely to enter a recession this year, many countries need to seek new markets for their exports, reports the Bangkok Post.
The export of Chinese products to Asean countries including Thailand will affect the Thai export sector. This situation must be kept under close watch, said the federation.
The export sector is facing many challenges, including the impact of geopolitical conflicts, high energy costs and the fluctuation of foreign exchange rates.
The FTI said the value of the baht against the US dollar should stand at appropriate levels. If the baht gets considerably stronger, Thai exporters will bear a heavy brunt.
The baht’s value should stand at 34 per US dollar, but its value has fluctuated greatly from 38.08 in October last year to 32.88 this month, according to Suchart Chantaranakaracha, vice-chairman of the FTI, who talked about the currency issue when the federation announced last week the Thailand Industry Sentiment Index (TISI) for January.
The Joint Standing Committee on Commerce, Industry and Banking expects the export sector to grow by 1-2% in 2023. GDP growth is projected to be between 3-3.5%, with inflation standing at 2.7-3.2%.
According to the FTI, the January TISI is based on a survey of 1,321 enterprises across 45 industry clubs under the federation.
The respondents selected global economic conditions (73%) as their leading concern, followed by oil prices (58.5%), loan interest rates (50.2%) and foreign exchange rates (48.6%).
The global economy is likely to weaken because of sluggish economies in the US and European markets.
The FTI is also worried about a drop in foreign direct investment to 15% of GDP, down from 30-35%, as this would hit growth. The government needs to find ways to increase the country’s competitiveness in order to attract more foreign investors.
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