Shippers confident on exports, economic momentum builds
The Thai National Shipper’s Council said last week it is optimistic the country’s exports will grow this year despite a strengthening currency and container shortage as the Ministry of Finance said data for April shows the economy continues to gain momentum after a resilient first quarter.
The Council recently raised its forecast for export growth during the second quarter of this year to 5 percent after seeing strong results during the first quarter, said Ghanyapad Tantipipatpong, chairperson of the organization. Traders have been building up inventories that they are determined to move, she said.
The Ministry of Commerce reported last week that exports rose 8.5 percent year-on-year in April after rising 9.2 percent in March. The value of exports in April was $16.9 billion. Shipments increased to all regions except the European Union, where they fell by 1.7 percent, and the Middle East, which saw a 7.1 percent drop. The Shipper’s Council believes total exports for the year will grow between 2.5 and 3.5 percent, a half a percentage point higher than its previous forecast.
Exports are the most powerful piston in Thailand’s economic engine. Although successive governments have been taking measures to increase the contributions of consumption and investment to the country’s gross domestic product growth, exports remain the biggest contributor at this point in time.
Despite the good performance of exports in recent months, Ghanyapad said two factors are still raising concerns among shippers: a container shortage and a strengthening baht, the Thai currency.
Ghanyapad said the container shortage has prevented Thai exporters from delivering their goods overseas on time and could hurt future growth. She said shipping lines have reduced their allotments of containers to Thai exporters because they did not want to bear the costs of shipping empty containers to the Kingdom.
The rising baht is also a concern and has drawn the attention of the Bank of Thailand governor who said if it continues to rise out of proportion to other currencies the central bank may have to intervene.
Meanwhile, the Ministry of Finance said the economy would continue pick up pace during the second quarter, building on the momentum of the first quarter, which saw 3.3 percent growth. The Ministry expects GDP growth for the year to total 3.6 percent.
Rising commodities prices, improved agricultural production, increasing vehicles sales and consistently strong tourism growth will keep the economy accelerating, said Krisda Chinavicharana, director-general of the Fiscal Policy Office.