ASEAN KEY DESTINATIONS
Thai business still wary of currency's rise
"The survey of 820 business operators reveals they think the measures are not enough and the government needs to do more." said Thanavath Phonvichai, an economist at the University of the Thai Chamber of Commerce.
Mr. Thanavath said the baht's strength would curb export revenue and lead to liquidity problems. Small operators are the hardest hit, and the impact would be clearly felt the last quarter of this year with losses, overtime pay cuts, layoffs, and possible business liquidation, he added. "Thai operators are likely to tolerate the baht's level for the next few months," he said. "If the baht's strength persists, the impact will expand next year."
The baht has appreciated more than 11 percent this year, the best performance in Asia outside Japan, raising concern that the country's exports may become more expensive relative to its regional rivals.
Mr. Thanavath said the currency's appreciation may trim economic growth by 0.5 percent to 0.7 percent this year. Thailand's economy may expand 7 percent this year, down from an earlier forecast of 7.5 percent, he said.
He forecast economic growth next year may be as little as 3 percent, compared with an earlier forecast of 4 percent.
"For longer-term measures, we need to carefully consider the conditions, efficiency and side effects of any action as there are both winners and losers from exchange rate moves," he said yesterday.
The baht was trading yesterday at 29.84/86 to the dollar.
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