BANGKOK, Jan 7 – Thailand’s months-long political stalemate will possibly result in a slight export deficit in the first quarter of the year, the University of Thai Chamber of Commerce (UTCC) predicted today.
Ath Pisalvanich, director of the UTCC International Trade Studies Centre, said the country’s overall exports this year should grow by 2.1-5.6 per cent, or at an average of 3.8 per cent.
The export deficit in Q1 will be around 1.9-1.5 per cent, or 0.15 per cent on average, as the Thai currency depreciated to Bt32.07-32.24 against the dollar, or Bt32.16 on average – the weakest in five years, he said.
He said the baht plunged 7.9 per cent last year and it has dropped for the last four quarters given the global economic slowdown despite a slight strength in some markets.
Mr Ath said economic restoration in Japan has been slow in light of decreasing consumption after the government increased taxes from 5 per cent to 8 per cent, predicting Japan’s inactive economy to continue into Q2.
Thailand’s exports in Q2 will, however, surge back should the political unrest be resolved soon, he said, adding that the kingdom should enjoy an export surplus given the positive baht prospects and strengthened global economy especially among the country’s trading partners.
He was optimistic that the Thai economy will improve in Q2-Q4 with export growth at 4 per cent in Q2, 7 per cent in Q3 and 10 per cent in Q4, or a total growth of 4-5 per cent this year.
The domestic political risk is less severe than that of the global economy and inflation, and foreign exchange volatility.
He was, however, concerned that the prolonged political turmoil, though not escalating to airport or seaport shutdowns, will negatively impact international confidence in Thailand.
