Due to forex losses amidst a slow global economy, garment exporters are now resigned to a contraction of 4 per cent this year, instead of zero or about 2 per cent expansion. The minimal depreciation of the baht and deflation in the EU is weighing heavily on the industry, says the Thai Garment Manufacturers Association.

As per the association, the US is still the major market for Thai garments followed by the EU, Japan and Asian countries. The industry that lost EU import-duty privileges for apparel early this year has many negative factors hitting global economic expansion. Last year, garment shipments to US were flat at about $2.9 billion. The recovery in the United States was too slow while buyers have focused more on Vietnam and other countries with cheaper labour. The US will have free trade with Vietnam under the Trans Pacific Partnership, so some importers have turned to doing business with Vietnam instead of Thailand. The government should ensure that the baht moves in line with export rivals. So far, the baht has depreciated the least among Asian currencies, it adds.