On March 7, 2019, Mr. Suphan Mongkolsuthee, Chairman of the Federation of Thai Industries (FTI), revealed the results of a meeting of the Joint Private Sector Committee comprising FTI, the Thai Chamber of Commerce, and the Thai Bankers' Association. They acknowledged that the Thai baht has been fluctuating rapidly, currently at 31.80 baht per US dollar, depreciating by 2.4% from the previous week after appreciating by 2-3%. This reflects the high volatility of the baht, causing concern among entrepreneurs who fear they may not be able to adapt quickly enough. They hope for the baht to move according to market mechanisms without excessive fluctuations.

“Last week, speculation caused the baht to swing between appreciation and depreciation too quickly. After a period of strengthening, it suddenly weakened by 2.4%, making it difficult for exporters to set product prices. The private sector believes that fluctuations should not exceed 0.5%, and the appropriate level for the baht should be around 32 baht per US dollar,” Mr. Suphan stated.

Furthermore, the Joint Private Sector Committee (JCC) views that Thailand's overall exports are expected to grow within the forecast range of 5-7%, better than last year's growth of 6.7%, due to an improvement in the global economy following positive signs in the trade conflict between China and the United States. However, they still need to monitor uncertainties from the upcoming agreement discussions between the US and China on March 27, as they acknowledge that part of the impact may stem from the baht's movements. This is evident from February's data, where Thai exports to China contracted by 16.7%, despite the baht beginning to weaken, it remains highly volatile.

Mr. Suphan stated that the JCC still forecasts Thailand's economic growth rate this year at 4-4.3%, compared to last year's growth of 4.1%. The inflation rate is projected to be between 0.8-1.2%, down from 1.1%. The tourism sector is also expected to grow well, with a forecast of 5% growth compared to last year's 7%, as January saw 1 million Chinese tourists returning to Thailand. Additionally, with Thailand entering an election mode, there is increased confidence in the overall economy, although it is essential to monitor for any potential severe events after March 24. If everything goes smoothly, it is believed that various investment projects awaiting clarity after the elections will proceed. There is no concern regarding the political situation in the country, even with the court's consideration of dissolving the Thai Raksa Chart Party, as it is believed that there will be no violence like in the past.

Mr. Suphan mentioned that the JCC will propose what they would like the government to implement in terms of economic, trade, and investment policies for the benefit of the country's economy immediately after the elections, which are expected to result in a new government being formed by May 2019.

 

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