Meeting airs export concerns

Despite mounting concerns about the strong baht and emerging protectionist measures, the government and private sector predict Thai export growth of 6% this year to US$250 billion (7.8 trillion baht).

According to Commerce Minister Sontirat Sontijirawong, who met business leaders yesterday to discuss the country’s export prospects, the consensus was that export growth is likely to average 6% this year, driven by shipments of electronics, rubber products and finished oil.

The meeting also mutually agreed that the strong baht is a key threat to the performance of Thai exports this year.

According to Mr Sontirat, the Joint Standing Committee on Commerce, Industry and Banking will later propose guidelines for the government to tackle the baht’s appreciation.

The private sector recently called on the government to quickly resolve the problem and bring the baht’s movements in line with those of other Asean currencies.

The Bank of Thailand has also been asked to team up with financial institutions to jointly offer foreign exchange hedging tools with lower fees to small and medium-sized enterprises to provide greater immunity against foreign exchange fluctuation.

Business leaders have urged the central bank to come up with more mechanisms to entice capital outflows, while the private sector itself aims to step up importation of raw materials while the baht is strong. The government has further been urged to promote more outbound investment.

Sanan Angubolkul, vice-chairman of the Board of Trade, said the 6% growth forecast is based on the assumption that the baht stands at 32 to the US dollar this year.

“What we really want is for the Bank of Thailand to give a clear-cut statement that it is closely monitoring the exchange rate and will come up with a mechanism to prevent financial institutions and exporters from any speculation,” Mr Sanan said.

He said the government should also promote direct trading in various currencies such as China’s yuan, Indonesia’s rupiah and Malaysia’s ringgit, as well as Japan’s yen and South Korea’s won.

According to Mr Sontirat, the Commerce Ministry’s International Trade Promotion Department will hold a meeting of Thai commercial counsellors worldwide on Feb 19 to evaluate the export environment and map out export promotion plans for the year to be submitted to Deputy Prime Minister Somkid Jatusripitak.