Strong Baht Deters Thai Industrial Exports

[webfact]

Strong baht deters Thai industrial exports
By English News



BANGKOK, April 19 – The rising Thai baht, now less than Bt29 to the dollar, has dipped the value of Thailand’s industrial exports by more than Bt35.48 billion (US$1.22 billion) in the first two months of this year, according to the Ministry of Industry.

The Industrial Economics Office revealed that foreign capital inflows into Southeast Asia, including Thailand’s bond market, have contributed to the rapid appreciation of the baht.

Industry Ministry spokesman Nattapon Nattasomboon said more than US$4 billion was injected into the Thai capital market in January alone, compared to US$5 billion for the whole of last year.

He called on the Bank of Thailand (BoT) to stabilise the Thai currency to prevent severe negative impacts on industrial exports, indicating that the baht appreciation to Bt29 against the dollar has reduced the value of industrial exports by Bt384.7 billion (US$13.2 billion) while the industrial GDP dropped by 1.1 per cent.

It was earlier estimated that Thailand’s industrial export growth would be 5-6 per cent this year based on the exchange rate of Bt30.58 against the dollar. Now that the baht has risen rapidly, industrial export growth is expected to be 4-5 per cent at most.

If the baht gains strength to Bt28 against the dollar, to 9.92 per cent of GDP, the kingdom’s industrial export value will decline by Bt569.3 billion (US$19.6 billion) or 11.02 per cent while industrial GDP growth will be only 1.5-2.5 per cent instead of the originally estimated 5-6 per cent.

Mr Nattapon said foreign investments in Southeast Asia have increased given a forecast by the International Monetary Fund (IMF) that the region’s economy will expand 5.9 per cent while the growth of US and European economies will slip.

The US economy will expand at only 1.9 per cent whereas the Eurozone will shrink from the earlier forecast of 0.1 per cent to 0.3 per cent with France, Italy and Spain becoming the hardest-hit countries. Germany will continue to move forward.

Japan should see a 1.6 per cent economic growth after the government announced quantitative easing. The country originally predicted a growth at only 1.2 per cent.

He urged industrial operators to penetrate into Southeast Asian market including Cambodia, Lao PDR, Myanmar and Vietnam, known as CLMV group.

The Industry Ministry will propose to the Cabinet assistance measures for small- and medium-sized enterprises with a Bt10 billion fund in addition to the Bt3 billion already allocated for the purpose, he said. (MCOT online news)


-- TNA 2013-04-19

[Plastic Brontosaurus]

In the past week or so the baht has been rising against the AUD and NZD too (and presumably other currencies). Before it was mainly the USD and JPY, which is logical due to the quantitative easing happening in the US and Japan.

I guess they gotta try and get the baht back in check as in the mid term it will probably be disadvantageous across the board to have the baht this high (not just exports but tourism as well).

[trevoromgh]

The £pound has dropped by 12% against the baht in four months! Ouch it hurts

[Chao Lao Beach]

baht just strengthen again this arvo, new record apparently.

[StevenHeidbriderSr]

ALL I can say is I am deferring any major purchase until the Thai Baht gets in check. I am also not bringing any more money in until the USD is at least $1=30 Baht.

Thank God I brought enough in back in March 2012 and more up til recently to cover ALL I need for now.

[JulesMad]

Baht goes up, export goes down = Big News?!?!?

These are the laws of Economics, Thailand can't have it both ways! So sorry

[bangkokburning]

Really the shot across the bow. BOT will announce QE measures is my guess.

Thailands exports could vanish overnight.

"Stuff" can be sourced anywhere. The world is awash in stuff.

Thailand better wtfu and fast.

Costs time, money and effort to tesource as well. Once vendors move, they will not simply return on price unless its a huge difference. Seems trend here is up not down as well so Thais can kiss export markets good bye.

I wonder how automobiles are priced being shipped abroad. THB or Yen?

[metisdead]

Off topic insulting and baiting posts and replies have been removed.