Euro debt crisis to trim exports
The government should keep close watch on the financial crisis in Europe because it will certainly affect the Thai export sector, former finance minister Korn Chatikavanij said on Tuesday.
The Democrat deputy leader said the debt crisis in Greece would definitely have a direct negative impact on the trade partners of countries in the European community, including Thailand.
"Prime Minister Yingluck Shinawatra has failed to properly inform the general public about the government’s plan to deal with the negative consequences, particularly how it would ease the damage caused by the euro zone crisis," Mr Korn said.
There were a few economic ministers who talked about their policies to oversee the economy, but that was without any clear direction from the government leader, he added.
Mr Korn said Finance Minister Kittiratt Na-Ranong said the other day that exports would grow by 15 per cent this year, but that was just Mr Kittiratt being hopeful. The fact was, exports contracted over the first four months of the year. He did not give the contraction figure.
He said Mr Kittiratt has a real intention to resolve economic problems, but he must work alongside other ministries and the private sector in protecting the country from possible damage from global economic crises.
Bank of Thailand's Macroeconomic Policy and Analysis Office director Songtum Pinto said the central bank's revised economic growth forecast for this year is still close to the initial projection at six percent.
"The Thai economy has been affected by positive and negative factors at the same time but there are no significant changes from the previous forecast.
"But the debt crisis in Europe has affected Thai exports and the central bank has to lower the export growth forecast from 9.3 per cent 8.0 per cent," Mr Songtum said.
He said the European economy would likely contract 0.7 per cent this year, instead of 0.5 per cent as predicted earlier.
Ath Pisalvanich, director of the International Trade Studies Centre at the University of the Thai Chamber of Commerce, said the continuing financial crisis in Europe would cut projected export growth from 15 per cent to seven per cent to eight per cent this year.
The euro debt crisis in Greece would delay exports of Thai products to Greece, Portugal, Iceland, Spain and Italy. The damage was estimated at between 100 and 150 billion baht, said Mr Ath.
If Thailand could find new markets to replace trade partners in Europe, its exports could still grow by 10 per cent to 12 per cent, but still below the 15 per cent targeted by the Commerce Ministry, he added.
The director said the ministry’s export target is unlikely to be achieved because even though Thailand could ship products to new markets, its alternative export markets, including India and China, were also affected by the euro debt crisis.
Moreover, in seeking the new export markets, Thailand would also face a problem of a price war. Several other countries would also be looking for new export markets, he said.
The election result in Greece, which showed that the debt-stricken country would maintain its membership of the euro zone, is a good sign, he said, But the crisis had not been settled. It would take about three to five years to solve it, he added.
Mr Ath projected that even with the impact of the euro debt crisis, the gross domestic product for 2012 would grow by five to six per cent.
19 June 2012