Thai Exports Expected to Contract by 1.5% to 1% in 2023; Three Measures Recommended to Boost Final Quarter Exports

For the overall international trade of Thailand from January to August 2023 compared to the same period last year (YoY), it was found that Thailand's total exports amounted to $187,593.1 million, a contraction of 4.5%, with a value in Thai Baht of 6,379,734 million Baht, a contraction of 3.9% (excluding gold, oil, and military weapons, exports from January to August contracted by 1.5%). Meanwhile, imports amounted to $195,518.6 million, a contraction of 5.7% and had a value in Thai Baht of 6,732,833 million Baht, a contraction of 5.3% resulting in a trade deficit for Thailand from January to August 2023 of $7,925.4 million or 353,009 million Baht.

Additionally, the TNSC forecasts the export target for the entire year of 2023 to contract by -1.5% to -1% (as of October 2023), with significant risk factors hindering growth in 2023 including: 1) The slowdown of the global economy affecting key trading partners such as the European market and China, where the Chinese economy is recovering slowly, the real estate sector and domestic demand are weak, and demand for goods and services is declining. Global interest rates remain high, impacting economic slowdown and the cost burden of borrowing for businesses. 2) The manufacturing index (PMI) remains low, with the U.S., Europe, and Japan at levels of 48.9, 43.4, and 48.6 respectively. 3) Rising raw material costs, such as increased oil prices due to reduced supply. 4) Global climate change may lead to uncertainty in production volumes and keep agricultural and food costs high.

The TNSC has proposed three measures to boost exports in the final quarter:

1. Accelerate 1.1) Promote trade activities in target markets (Exhibitions / Business matching / Incoming exhibitions) and increase budget for promotional activities, such as SMEs Proactive and the International Trade Promotion Fund, including: 1) Middle Eastern markets to promote exports of rice, chicken, automotive parts, processed food, and air conditioners. 2) Chinese market to promote exports of processed fruits, rubber, and cassava. 3) Unlock durian and longan quotas for Indonesia and the Philippines. 4) Promote exports of gems and jewelry, food, and automotive parts in the Indian market. 5) Promote exports of finished cars in Australia and the U.S. and expedite solutions to congestion at ports due to contamination from grass flowers (contaminated flowers mixed with exported cars). 1.2) Accelerate exports through e-commerce channels, supporting exporters to increase their presence on platforms in target markets.

2. Strengthen 2.1) Enhance Thailand's soft power concretely, similar to New Zealand's promotion of “kiwi” as its national fruit and a key export product. 2.2) Promote the registration of GI (Geographical Indicator) for Monthong durian, Kwan Yao mango, and Phuang Manee to create value and prevent imitation of Thai unique products. 2.3) Prepare for the establishment of the Environmental Committee to support non-tariff trade measures related to exporters. 2.4) Strengthen negotiations with shipping lines to increase container capacity and transport capacity from service contracts to accommodate the expected increase in spot shipments.