A view of Bangkok's port along Chao Phraya River is photographed during sunset in Bangkok, Thailand, July 19, 2022. (Photo: Reuters)Bangkok (VNA) – Long-term structural obstacles in the exportand manufacturing sectors are having significant impacts on Thailand's economywhile affecting its ability to compete globally, the Bank of Thailand (BoT) has reported.
According to a recent report of the BoT, the country's export sector has lost competitiveness in global markets, with the market shareof rice shipments falling by more than 50% over the past 20 years. Among theproducts that dented export value growth last year, more than 70% recordeddeclining competitiveness and other structural headwinds.
Notably, agricultural products such as rice reported a lowermarket share, from 25% in 2003 to 13% at present. Petrochemical goods are beingaffected by China's dual circulation strategy, while hard disk drives are beingsubstituted by solid state drives, which Thai producers lack the capability toproduce.
The report noted Thailand's electronics export growthaveraged only 4% over the past decade, well below its regional peers such asVietnam, the Philippines and Malaysia, which posted export growth of 37%, 14%and 10%, respectively. The share of imports from China alone increased from 5%to 9% over the same period.
The central bank said exports and manufacturing activityshould expand at a moderate pace, in line with the slow recovery in globaldemand and softer tailwinds from the electronics cycle upturn.
However,structural obstacles, particularly deteriorating competitiveness in the exportsector, would increasingly hamper growth and limit spillover benefits from aglobal demand recovery in the absence of structural reforms.
At the latest meeting, the Monetary Policy Committee (MPC) voted 5-2 to maintain the policy rate at 2.5%. Two members voted to cutthe rate by a quarter percentage point.
In addition, the MPC said the current loan-to-value (LTV)measures remain appropriate. Some property developers recently asked theFinance Ministry to loosen the LTV measures to increase activity in the sector.
However, the MPC held that the current LTV measuresremained conducive to housing affordability for the vast majority of thepublic, with 90% of buyers unconstrained by the criteria and able to obtainloans at 100% of property value without a down payment./.
