Rosier economic prospects in the EU, eventually bringing the bloc out of recession as the economic gauges of many member states pick up, have led us at KResearch to take a better view toward the economies there. Industrial investments are believed to be key to EU growth of 0.9 percent in 2014, with over 2-percent expansion expected within 11 states that account for 44 percent of Thailand's shipments to the EU.
Due to this brighter outlook, KResearch forecasts that Thai exports to the EU will see some 3.6 percent growth in 2014, beating 2013 at 2.6 percent. This moderate improvement will likely be the result of individual state recoveries – not the entire bloc, and of the fact that over 15 percent of our exports to EU are now excluded from GSP (Generalized System of Preferences) benefits.
Looking at EU-ASEAN bilateral trade, Vietnam has quickly become a key participant with average growth of 21.2 percent p.a. between 2008-2012. Being the fifth most active trade nation with the EU in 2010, Vietnam moved up to second place in 2013, and thus will be a major exporter expected to receive much attention this year. Nevertheless, a study tells us that Thailand still has an advantage over some competitors in certain products, e.g., machinery, gems and jewelry, and farm produce that should perform outstandingly, livening up Thailand's outbound trade outlook during 2014.
Some industries may remain competitive here, but other nations have been doing better in manufacturing. For this reason, Thai industrialists will need to increase their efforts toward adding value to their products, making them more desirable; or may consider shifting production to offshore locales to cut costs.
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