Kasikorn Research Center (KResearch) has adjusted its expected GDP growth figure this year, lowering it from 3.7 to 3.1 percent as a result of no growth in the export sector due to the ongoing trade war, which is expected to have a bigger effect next year.
KResearch Assistant Managing Director Nattaporn Triratanasirikul revealed today that the prolonged trade war has affected the export sector by 0.6 percent, worth 31 billion US dollars, while the continuous appreciation of the Thai currency will mean the export sector achieves zero growth this year, from the previous target figure of 3.2 percent.
This situation will also decelerate Thai economic growth this year, bringing GDP growth down from 3.7 percent to 3.1 percent.
The Thai economy in 2020 is expected to be hit even harder by the effects of the trade war
Despite the lower GDP, the Thai economy in the latter half of this year is expected to perform better than in the first half as a result of the new government’s economic stimulation measures, as the coalition is expected to bring forward policies promised in the election campaign such as Pracharat campaigns, a farm product pricing guarantee, and urgent measures to mitigate the effects of a decelerating global economy.
It is thought the U.S. Federal Reserve Bank may reduce its policy rate once or even twice this year, given signs of a weakened U.S. economy, while overall commercial bank loans will grow by 4.5 percent, lower than previous expectations of 5 percent due to slower performance of business sector loans and residential loans affected by advanced purchases earlier.
The volume of non-performing loans (NPL) might increase, especially restructured debts, but the overall level is expected to remain between 2.98 and 3 percent.