The gains of export businesses from the weakest Thai baht in 3 years
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On September 23, 2021, the Bank of Thailand reported the latest foreign exchange rates at 33.498 baht / US dollar, which was the weakest level of the Thai baht in three years following the Fed’s unchanged interest rates and the likely QE limit cut in mid-2022. It is possible that the Fed may continue raising interest rates faster due to previous pressure from the European Central Bank.Factors affecting the weaker Thai baht
- It was a good economic recovery trend in Europe and America after the rise in US inflation. As a result, The Fed started to signal a reduction in pouring money into the system and strengthened the US dollar, leading to pressure on the currencies in the ASEAN region.
- Thailand is still experiencing the spread of the viral pandemic, causing a slow-down in economic recovery. Consequently, economic analysts have reduced the level of Thailand’s recovery due to the excessive dependence on tourism of the Thai economy.
- The economy of neighboring countries in the region gained much benefit from exports, such as Vietnam, Indonesia, and Malaysia, thus having a less weaker currency than Thailand.
Business groups gaining from the weaker Thai baht
Most of the business groups who have gained from the weakened Thai baht are in the export sector, especially the manufacturing industry of electronic components, automobiles and parts, rubber, plastic sheet and chemicals. During the first half of the year, the top 5 Thai export products are as follows:
At present, the businesses who have gained from the weaker Thai baht and considered as the heart of foreign investments are mostly in the industrial estates or industrial parks. There are makers or manufacturers of parts in those industrial estates, thus there is no need to be concerned about searching for raw materials or other components in their production for export. Additionally, they can obtain various tax discounts when requesting for assistance from the BOI, including the new benefits by the Industrial Estate Authority of Thailand. In particular, the industrial parks have mostly benefited from the development of the Eastern Economic Corridor (EEC).
The 304 Industrial Park is one of the land developers to support all types of manufacturing industries for Ready built Factories and sales lands with complete infrastructures and utilities. It is located in an area of the Prachinburi and Chachoengsao and also receives benefits from the Board of the BOI.
- Automobiles and parts - export value of 451,521.60 million baht
- Computer and components - export value of 318,514.30 million baht
- Rubber products - export value of 230,531.40 million baht
- Plastic sheet - export value of 162,268.20 million baht
- Chemicals - export value of 138,459.00 million baht
Business groups affected by the weaker Thai baht
The business groups affected by the weaker Thai baht are those which import goods from abroad, such as luxury goods, raw materials in the production process, oil, etc.
At present, the businesses who have gained from the weaker Thai baht and considered as the heart of foreign investments are mostly in the industrial estates or industrial parks. There are makers or manufacturers of parts in those industrial estates, thus there is no need to be concerned about searching for raw materials or other components in their production for export. Additionally, they can obtain various tax discounts when requesting for assistance from the BOI, including the new benefits by the Industrial Estate Authority of Thailand. In particular, the industrial parks have mostly benefited from the development of the Eastern Economic Corridor (EEC).
The 304 Industrial Park is one of the land developers to support all types of manufacturing industries for Ready built Factories and sales lands with complete infrastructures and utilities. It is located in an area of the Prachinburi and Chachoengsao and also receives benefits from the Board of the BOI.
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