The Thai National Shippers' Council (TNSC) has revised the 2017 export growth forecast up to 5% from its previous forecast of 2.5-3.5%, as exports rose in the second quarter of the year, indicating recovery in major importing countries.
TNSC chairwoman Ganyaphad Tantipipatpong said strong demand has lifted export growth substantially, with shipments in June growing 11.7% year-on-year to US$20.3 billion (676 billion baht).
Exports in the first half of this year on average grew 7.8% to $113.5 billion.
"We also expected exports in the second half of the year to be better than the first half due to the growing reputation of Thai goods in major exporting markets, where economies are improving," she said.
Ms Ganyaphad said the TNSC expects Thai exports to rise further in many sectors and orders from overseas markets to rise substantially in the last quarter of the year to meet strong demand for Christmas and year-end celebrations, encouraging the TNSC to revise up export growth for the whole year of 2017 to 5%.
But Ms Ganyaphad said there were also risks lying ahead that could pare export rises in the second half.
"Major negative factors include the stronger Thai baht and rising oil prices, which could add to export costs," she said.
The baht has risen more than 7% so far this year, becoming one of the strongest currencies in the region.
Ms Ganyaphad said the baht is rising in line with Thailand's stronger current account, and that, combined with the rise in the registered capital of companies in the Stock Exchange of Thailand, has created short-term inflows that have pushed the baht even higher. This could result in the final push that makes it difficult for exporters to avoid incurring losses from the exchange rate fluctuations.
"Rebounding oil prices that are stabilising at relatively strong levels are also pushing costs higher," she said.
The TNSC has also kept a close eye on the impact of the new Royal Decree on the Recruitment of Foreigners, which the Prime Minister has postponed through Section 44 for another six months due to private sector concerns of increasing labour costs.
The TNSC is also monitoring Arab countries' severance of diplomatic ties with Qatar to gauge any major effects on the Thai economy, particularly in the oil and gas sectors, and possible falls in export orders from the Middle East.
Ms Ganyaphad said the TNSC will raise concerns, particularly about the strong baht, to the government, and demand it come up with measures to stabilise the baht as well as some measures to help support exporters, who could be hurt by the stronger baht. The TNSC also wants the government to have a long-term policy to support foreign investment in Thailand.