Commerce Ministry hopes to drive exports up by four percent
The Commerce Ministry is preparing a proposal to be sent to the military-installed government which will outline plans and make recommendations designed to reach the government’s commitment to drive export growth during 2015 to four percent.
This is despite some less than sanguine figures from other agencies which believe export growth may well be restricted to anywhere between 2.5 and three percent.
The deputy commerce minister, Apiradi Tantraporn, is quoted as saying that ‘exports should be promoted to become a national agenda in which all parties drive their growth.’
One of the first tasks has been the creation of an international trade promotion committee, chaired by prime minister Prayut Chan-ocha. It will represent all relevant ministries as well as the Thai Chamber of Commerce, the Federation of Thai Industries and the Thai National Shippers’ Council (TNSC).
This committee has been set the task of examining what obstacles there are to exports and implementing export stimulus measures.
Included in the overall framework is cross-border trade with neighbours such as Malaysia, Myanmar, Cambodia, and Laos and the Commerce Ministry has already set out its 2015 agenda, aiming to grow this sector by 30 percent to 1.5 trillion baht.
The deputy commerce minister readily admits that the overall task is quite daunting given outside factors. These include the still very shaky global economy in general, volatile foreign exchange rates (for example, the Russian ruble) and the current low level of oil prices.
In January the Commerce Ministry announced that exports had contracted by 0.41 percent during 2014 to total US$228 billion. This was the second successive year Thai exports had fallen, with 2013 seeing a 0.3 percent contraction.
While the government is attempting to put the brightest face on the export market and is talking up its aims of four percent growth, economic forecasters in senior positions elsewhere are far from certain the growth in exports can go anywhere near reaching the government target.
The Bank of Thailand has warned that export growth might not even reach one percent in 2015, simply due to the fall in the price of crude oil and this had meant the value of oil-related products had declined in line with this slump.
Products affected by the low oil price include cassava, chemicals, rubber, petrochemicals and petroleum products, all of which account for 20 percent of Thailand’s overall export trade.
The TNSC said in January its export growth forecast had been slashed from a previously hopeful 2.5 percent to a pessimistic 1.5 percent, or around US$231 billion in total.
Further negatives include the termination of the Generalised System of Preferences tariff privileges in European countries, as well as lower crop prices and the on-going troubles in the Ukraine.