Thailand's Export Outlook

BANGKOK (Reuters) – Thailand's exports are predicted to increase by 2% this year, reaching the upper limit of a previous estimate of 1% to 2% growth. However, the rapidly strengthening baht poses a challenge for the remainder of the year, according to the Thai National Shippers' Council on Tuesday.

The baht recently hit its highest point in 31 months, trading at 32.125 against the US dollar. So far this year, the baht has appreciated 5.2%, making it the second-best performing currency in the region, following Malaysia's ringgit.

Officials from the central bank indicated that the baht's swift rise is affecting exporters and tourism, prompting concerns about economic stability. Chaichan Chareonsuk, chairman of the council, stated that "the baht's appreciation is too fast compared to our partners and competitors" and warned that this trend negatively impacts agriculture and food exports.

Chaichan pointed out that although exports increased by 4.2% in the first eight months of 2024, largely due to a weaker baht, the export sector faces significant risks. In contrast, exports fell by 1% throughout 2023, although a 7% increase was recorded in August. The appreciating baht is anticipated to affect shipments in the fourth quarter.

Exporters are also requesting the government to postpone plans to increase the minimum wage, which could influence their cost structures and overall competitiveness. Chaichan emphasized that the wage increase should not be considered at this moment, despite the government already delaying the wage rise, scheduled for October, where it was set to increase by 8% to 20%, based on the region.