Thailand's Exports Expected to Rise 2% Amid Strong Baht: Impact on Economy and Investments
Thailand's exports are projected to increase by 2% this year, surpassing the previous forecast of 1% to 2% growth, according to the Thai National Shippers' Council. However, the rapidly strengthening baht poses a challenge for the remainder of the year, with the currency reaching its highest level in 31 months and trading at 32.125 against the US dollar. Year-to-date, the baht has appreciated by 5.2%, making it the second best-performing currency in the region after Malaysia's ringgit.
Chaichan Chareonsuk, chairman of the council, expressed concerns about the impact of the baht's strength on agriculture and food shipments in the coming months. Despite a 4.2% increase in exports during the first eight months of 2024 compared to the same period last year, the appreciation of the baht is expected to affect fourth-quarter shipments. Strong export numbers earlier in the year were attributed to the weak baht.
The rapid appreciation of the baht has raised concerns among exporters and the tourism sector, with the central bank acknowledging the impact on spending. While the central bank has managed the baht's volatility, the next few months are expected to be challenging for Thai exporters.
Analysis:
Thailand's export industry is facing a mixed outlook, with projected growth of 2% for the year but challenges posed by the strengthening baht. The appreciation of the currency could impact various sectors, including agriculture and tourism, leading to potential hurdles in the final stretch of the year. Investors and individuals involved in international trade should monitor the baht's movement closely to make informed decisions about their finances and investments.