Thailand's exports contracted more than expected in December and only modest growth was expected for 2023 as the global economy slowed and a strong baht currency hurt trade competitiveness, the commerce ministry said on Tuesday.
Exports, a key driver of growth, dropped 14.6% in December from a year earlier, worse than a forecast 11.5% fall in a Reuters poll.
In 2022, Thailand's exports value hit a record high of $287 billion from 5.5% growth, beating the ministry's target of a 4% rise, according to its statement.
For 2023, the ministry is targeting growth of just 1% to 2% this year, which was also agreed by the private sector, Commerce Minister Jurin Laksanawisit said.
"There are many negative factors such as the slowing economy, particularly the economies of Thailand's major trade partners," he told a news conference.
High oil prices have pushed up costs, with the strengthening of the baht reducing export competitiveness, Jurin said.
The baht has appreciated by 5.5% against the dollar so far this year, becoming Asia's best performing currency, driven by a weaker dollar and China's earlier-than-expected reopening.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said exports should not contract this year, helping the economy.
Among major markets in December, exports to the United States dropped 3.9% year-on-year while those to Southeast Asia fell 19.0%. Exports to China fell 20.8% from a year earlier, the ministry said.
In December, imports fell 12% from a year earlier, compared with a forecast 8% drop. Many imports will be used for producing goods to be shipped out again.
Thailand recorded a trade deficit of $1.03 billion in December, versus a forecast deficit of $1.06 billion.
In 2022, imports rose 13.6%, with a trade deficit of $16.1 billion.
(Reuters - Reporting by Orathai Sriring, Satawasin Staporncharnchai and Kitiphong Thaichareon)
