For the first eight months of this year, Thai garment shipments fetched $1.95 billion, a slight increase of one per cent from the same period last year. However, they are expected to soar in the remaining months due to the festive season spending spree. Thailand’s garment exports are expected to grow by two per cent this year.
Right now the country can avail of GSP for exports to the European Union but this privilege may end early next year. If this happens, Thai garment exports to the EU would be subject to a 12 per cent import tariff, up from the current 9.6 per cent, making Thai shipments less competitive in the EU market, particularly against Vietnamese products. This may induce Thai manufacturers, particularly medium and large-scale operators, to relocate their production bases to Vietnam or Myanmar.
Slowing demand from the US and EU has been offset by a rise in Thailand’s exports to Asia - including China, Hong Kong, Korea and Japan - which now account for half the country’s total exports. Some 24 per cent of Thailand’s exports are within Asean and China takes up 12 per cent. But next year the country’s garment exports can grow five per cent if global economic conditions are in good shape.