BANGKOK – As the Thai Baht continues to rise against the green back Tourism Operators are feeling the pinch as foreign travellers are having to pay more while visiting, pushing them to other Asean countries where currencies have appreciated more moderately.
The Sports and Tourism Ministry has also blamed the strength of the baht, in part, for a drop in some tourist demographics travelling to Thailand.
Statistics show big drops from Middle Eastern countries, which dipped 47% year-on-year; Africa, which contracted 28%; the US, down 20%; Europe, a loss of 12%; and China, down 11%.
Thailand’s Tourism Authority of Thailand (TAT) has cut its estimate for tourism revenue growth for 2019 from 10% to 9.5%, attributing the set back to the global slowdown, strong baht and rising fuel prices.
The baht averaged 32.48 to the US dollar in 2018 and is now moving in a range of 30.50-30.60.
Continued Baht Rise
In attempts to exert some pressure on the Thai Baht control levers, the Bank of Thailand says it’s scaling back the auction size of short-term bonds. The actions are an attempt to curb the rapid surge of the Thai Baht which hit a six-year high last Monday.
Swiss wealth and asset manager Lombard Odier predicts the baht to keep rising to a range of 29.59-29.89 against the greenback by the end of 2019, said Homin Lee, head of portfolio solutions for Asia and Asian macro strategy.
The baht is the top-performing currency in Asia, gaining about 6% this year to hit a fresh six-year high of 32.52 to the dollar. The currency strengthened 2.5% in the three months to June, the fastest pace among emerging Asian peers.
Lombard Odier’s forecasts are based on the assumption that the US Federal Reserve cuts rates and the dollar retreats.
The strong baht isn’t just effecting tourism according to the Thai National Shippers’ Council.
Limlurcha, vice-chairman of the Thai National Shippers’ Council, exporters have lost about 200 billion baht worth of income from the impact of the strong baht in the first five months of the year.
“If the baht still maintains its gain while responsible agencies have not come up with any measures to rein in the capital inflow, we believe Thai exporters, most of which are small and medium-sized ventures, will lose 400-500 billion baht worth of income,” Mr Visit said.
“This will eventually affect the capability of many exporters to pay bonuses or extra rewards, as well as overall spending power.”
Export Stimulus Plan
Meanwhile, Chutima Bunyapraphasara, the acting commerce minister, said on Wednesday that her ministry assigned the International Trade Promotion Department to map out an export stimulus plan for the second half to push for export growth of 3% as targeted.
Trade promotion agencies should focus more on each region of the world, each country and each city, including secondary cities, she said.
She urged high-ranking officials to accelerate underlining relations with their counterparts to expand trade and investment cooperation in South Asia.
Source: Bangkok Post, Bloomberg, Thai PBS