Strong baht hurts Thailand’s export-related industries

 BANGKOK: — Current strengthening of the Thai currency, the baht, has hurt the country’s export-related industries as well as the gross domestic product (GDP), a ranking industry ministry official said.

Nattapol Nattasomboon, deputy director-general of Industrial Economics Office, quoted a study conducted recently by his office which cited that if the baht strengthened by another 10 per cent, the country’s GDP would lower to 3.09 per cent from 4 per cent projected earlier.

And every volatility of the baht at one per cent will hurt national GDP by approximately 0.1 per cent and the industrial GDP at 0.09 per cent, said Mr. Nattapol.

Other sectors which will be impacted include declines in public consumption to 1.87 from 2.36 per cent, private investment to 0.13 from 0.59 per cent and exports to 8.49 from 13.23 per cent, he said.

On the other hand, imports will rise to 9.34 from 7.28 per cent.

But GDP could jump marginally to 3.26 per cent from an assumption that it would retreat to 3.09 per cent if labour and capital productivity rose which could cushion the impact from the strong baht, he said.

Since the beginning of 2006 up till now, the baht has appreciated more than 15 per cent against the US dollar, causing Thai manufacturing industries which have to depend on exports to have been impacted significantly. Thai industries which have been affected most are food, textile and furniture.

By late Friday, the baht moved at around Bt34.58-34.61 against the dollar on the onshore market compared to Bt34.59-34.62 on Thursday.

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