Thai exports seen up 2% this year but strong baht a challenge, shippers say
12:41 am Tuesday, October 01st, 2024
BANGKOK (Reuters) – Thailand’s exports are expected to rise 2% this year, the upper end of a previous forecast of 1% to 2% growth, but the rapidly strengthening baht could be a challenge for the rest of the year, the Thai National Shippers’ Council said on Tuesday.
The baht reached its highest level in 31 months this week trading at 32.125 against the greenback. Year-to-date, the baht has risen 5.2%, making it the region’s second best-performing currency after Malaysia’s ringgit.
The rapid appreciation of the baht was hitting exporters and tourism spending, the central bank said on Monday, and that it had managed the baht’s volatility.
“The baht’s appreciation is too fast when compared with our partners and competitors,” said Chaichan Chareonsuk, chairman of the council, adding the currency’s strength would hit agriculture and food shipments.
“This is the biggest risk … there are no supportive factors in the final stretch, we have to fight to drive exports.”
In the first eight months of 2024, exports rose 4.2% from the same period a year earlier, helped by a weaker baht, Chaichan said.
Exports, a key driver of the economy, fell 1% in the whole of 2023. They rose 7% in August, though the baht’s rise is expected to impact fourth-quarter shipments.
Exporters also urged the government to further delay plans to raise the minimum wage.
“This would impact the cost structure and our competitiveness. It should be delayed further, don’t consider it now,” said Chaichan.
The government so far has delayed plans to increase the daily minimum wage in October, which would rise by 8% to 20%, depending on the region.
(Reporting by Chayut Setboonsarng, Kitiphong Thaichareon and Thanadech Staporncharnchai; Editing by Martin Petty)
