Impact seen on Thailand’s exports after weak yuan

BANGKOK, Jan 9 (TNA) -- Global financial and capital markets will be affected after China has allowed the biggest fall in the yuan in five months earlier this week while Thailand’s exports will be heavily impacted because that country is presently number one trading partner of the kingdom, said Sompop Manarungsan, president of Panyapiwat Institute of Management (PIM). Thailand now exports between 11- 12 per cent out of the total to China and the decision to weaken the yuan against the US dollar would send the impact throughout the world while Thailand’s exports would be affected directly, said Associate Professor Sompop. The People's Bank of China set the official midpoint rate on the yuan, also known as the renminbi, 0.5 percent weaker at 6.5646 per dollar on Thursday, the lowest since March 2011. Current political tensions involving Iran and Saudi Arabia plus that of North Korea and debt problems now facing by several member countries of the European Union (EU) would pose a severe headache for Thailand in 2016, he said. Because of the external problems, Thailand’s gross domestic product is expected to stay around 3 per cent this year while the country’s exports would grow around 2-3 per cent, said Dr Sompop. He suggested that Thailand should not depend on export too much while the government has to accelerate on its plan to invest on mega infrastructure projects. Also, the Thai government has to carefully manage the country’s international reserves which are as high as 150 billion US dollars, the government should refrain from creating high debts, it should exercise privileges granted under the ASEAN Community framework and to heavily penetrate on the country’s servicing businesses in overseas in order to help the country’s economy from being impacted, he said. On high-speed rail projects now under negotiations between the Thai and Japanese and the Chinese governments. Dr Sompop said investment must be carried out in order to persuade foreign investors to invest in Thailand. Dr Sompop expressed his confidence that Thailand’s economy is still solid and every concerned party must cooperate with an aim to sail through the obstacles. (TNA)