Thailand: Strong baht sparks fears

  • The private sector has voiced concerns about the stronger baht, which recently hit a 31-month high, saying it could hurt exports and tourism as well as the overall Thai economy.
  • Some businesses have demanded new measures from the Bank of Thailand to curb the baht’s rise.
  • Kalin Sarasin, chairman of the Thai Chamber of Commerce and the Thai Board of Trade, said the baht is rising too fast and it will have a negative impact on exports, making shipments miss the chamber and government target of 6-8% in 2017.
  • He said the Bank of Thailand should issue measures to help curb the rise of the baht before it starts eroding exports, which account for more than 60% of the country’s GDP.
  • Mr Kalin said a stronger baht would also have a negative impact on tourism, another major facet of GDP, saying a healthy baht makes travelling in Thailand more expensive.
  • The baht has risen 9.9% in 2017 to THB32.50 per US dollar, hitting a 31-month high.
  • Mr Kalin said the JSCCIB predicts exports in 2017 to grow 6.5-7.0%, up from a previous forecast of 3.7-4.0%.
  • The Commerce Ministry forecasts export growth approaching 10% in 2017.
  • Exports totalled USD20.1bn in Oct 17, up 13.1% y/y, while the 10-month figure reached THB95.5bn, up 9.7% y/y, according to the Commerce Ministry’s data.
  • He said the JSCCIB estimates that exports could grow 6% in 2018, matching the initial forecast of the Commerce Ministry of 5-6%.
  • TNSC chairwoman Ghanyapad Tantipipatpong said the council has forecast 2017 exports to grow by 8.5-9.0% due to increasing demand for Thai products in major markets at a time when the global economy is recovering.
  • She said the growth of 8.5-9.0% measures export value in terms of US dollars. But in terms of the baht, Thailand could gain only 4%, as the stronger currency makes prices of goods and products cheaper once they are converted back into the local tender.

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