Thailand's export sector could lose between 300 billion and 500 billion baht as a result of the eurozone debt crisis, according to the Economic and Business Forecasting Centre at the University of Thai Chamber of Commerce.
Thanawat Ponwichai, the director of the centre, said on Thursday that the business sector is getting more worried about the continuing financial problems in Europe.
Vichai Assarasakorn, secretary general of the Thai Chamber of Commerce (TCC) and the Board of Trade of Thailand, said the TCC was concerned that the crisis would spread further and affect the Thai economy.
Photo by Somchai Poomlard
He said a recent survey by TCC found that industries that could be hurt by the eurozone crisis were textiles, jewellery, electrical appliances, electronics, food, rubber and tourism.
The situation was getting worse and would affect Thailand in the long-run because there were no clear-cut measures from the govrnment to deal with the negative consequences.
There was also an indirect effect on Thailand's other export markets, both in Asia and the US. Because other exporters worldwide could send fewer shipments to Europe, they send their products to other markets at low prices, Mr Vichai said.
As a result, Thai exporters now faced fiercer competition and a price war in other alternative export markets, he said.
Even though tourism related industries have not yet been severely affected, the fact is that the number of foreign tourists has been declining.
The quality of foreign tourists has also dropped because they had no purchasing power. This forced hoteliers to keep room rates unchanged while they had to launch promotion campaigns the whole year through to attract business, he added.
Finance Minister Kittiratt Na-Ranong said earlier that Thailand was well prepared for any fallout from the European crisis.
Mr Kittiratt said there was now tight coordination between agencies such as the Finance, Industry, Commerce, Energy, Transport and Foreign ministries to lessen the crisis impact, if any.
However, he conceded that the export industry would inevitably be affected to a certain level as Europe has always been one of Thailand's key markets, accounting for around 10 per cent of the country's exports.
Mr Kittiratt believed the government's 15 per cent export growth target for 2012 will be achieved if new markets can be opened to offset the drop in the European market.
Meanwhile, a study by the Office of Small and Medium Sized Enterprises Promotion said more than 70 per cent of small and medium sized enterprises (SMEs) may not survive when Thailand enters the Asean Economic Community in 2015.
At the Asean Connectivity forum hosted by the Foreign Ministry and the Thai-AEC, Office of SMEs Promotion deputy chief Wimolkarn Kosumas said out of three million SMEs in Thailand, over two million could be put out of business.
He said most of the SMEs lack professional business administration and marketing skills and were unwilling to update their products to international standards.
Their lack of English language proficiency is another factor that could harm them, he said.
"In the future, if SMEs from other Asean countries are set up in Thailand, local SMEs will not be able to compete with them," Dr Wimolkarn warned.