Thailand's export growth is likely to continue easing downward to below 15% year-on-year in the fourth quarter, says the Department of Export Promotion.

The growth rate has been declining since May, though first-half expansion was still high at 23.6% in US dollar terms. The strengthening of the baht has affected figures to a certain extent.

Risk factors in the second half include the exchange rate, the prospect of higher minimum wages making Thai goods more expensive, and weak global economic growth, said Nuntawan Sakuntanaga, the department's director-general.

Export growth this year should meet the target of 15% from US$195.3 million in 2010, but an improvement of up to 20% would depend on both domestic and external factors, she said.

In Ms Nuntawan's view, if the new government wants to increase the minimum wage, it should start slowly with selected provinces and industries.

"The rise in minimum wages should match workers' skills and productivity and make Thai products competitive in the global market," she said.

Aat Pisanwanich, director of the Center for International Trade Studies at University of the Thai Chamber of Commerce, also expects a declining trend of export growth in the third quarter due to economic problems in the US and Europe, and in China where its government is trying to curb the overheating economy.

The weaker dollar over the next three to four months will make Thai products more expensive, he added.

Pornsil Patcharintanakul, the deputy secretary-general of the Thai Chamber of Commerce, is optimistic that the stronger baht will not affect exports too much because Thailand performed well in the first half and farm product exports, especially rice, were good.

He predicted maximum export growth this year at 20%. If Thailand can handle political issues and labour costs by gradually raising the minimum wage, exporters will be able to adjust, he said.

An immediate rise in labour costs across the board would cause difficulties for exporters so the government should plan in advance and businesses may need to use more machinery, added Mr Pornsil.

Source: Bangkok Post