FTI vice president Mr. Kriangkrai Thiennukul said today that the FTI is seriously concerned that several factors, including the strengthening of the Thai currency to one of the strongest in the region, will worsen the economic slowdown in both the short and long term.
He pointed out that the baht fluctuated between 30.40-30.50 baht/US$ last week and reached the highest level against the US$ in six years.
The Thai currency has strengthened by 6% against the US greenback since the beginning of this year, making it stronger than other currencies in the region.
The strong Thai baht has made it a safe haven, in which foreign investors can speculatively park their cash in the baht currency and in government bonds.
Mr. Kriangkrai said the FTI expects the Bank of Thailand to monitor the Thai baht closely, to prevent its strength affecting Thai exports, which are already being hurt by the US-China trade war, and the tourism sector.
The FTI, the Thai Bankers Association and the Thai Chamber of Commerce, the three main pillars of the Thai private sector, recently adjusted downward the export growth projection for this year to between -1% and 1% and economic growth to 2.9-3%.
Additionally, Mr. Kriangkrai warned that there is a tendency for the projected export and economic growth rates to be further lowered.
He suggested that the government should speed up the concluding of FTA (Free Trade Area) agreements with Thailand’s trading partners, especially the European Union, to open up markets for Thai exports.
He raised another serious concern, which may affect the economy in the long term, namely the level of Thai household debt which, according to the latest findings by the National Economic and Social Development Board, is estimated at 13 trillion baht, the second highest in Asia after South Korea and the 11th highest in the world.
In the long run, he said, household debt will hurt people’s purchasing power and, in turn, will affect the overall economy.