Thailand’s exports to US market are forecast to contract by as much as 9.2% this year, due to the COVID-19 pandemic in the United States and the GSP privilege removal for some Thai products, according to the Kasikorn Research Centre (KRC).
A 9.2% contraction equates to a fall of about 28.5 billion dollars in export value, the lowest in a decade.
KRC said in its research paper that the US economy, hard hit by the pandemic, is expected to shrink by up to 4% this year, and all the measures introduced to curb the spread of the disease have affected the financial security of the American people, meaning that many of them will not be able to afford non-essential imported items.
60% of Thai exports to the US market are finished and unfinished luxury items, including automobiles and automotive parts, electrical appliances, ornaments, garments, sports ware and machinery spare parts.
Although the value of the Thai products facing removal of GSP status is insignificant, KRC said that it will make Thai products less competitive in the US market and may present an obstacle to increased penetration of that market with products like ceramics, motorcycles, shoes, wicker bags and artificial flowers.
Exports of medical and work-from-home products to the US are, however, expected to increase, but their overall value is not likely to offset the decrease in other product segments, said the KRC.
