Banking
SCB cuts GDP growth forecast to 3.1%
The EIC has revised downwards its Thai economic expectations in 2019 to 3.1 percent from 3.3 percent, largely as a result of the trade war between the United States and China

Bangkok, (NNT) – Government investment remains the main factor in steering the economy as the trade war between the United States and China has affected exports, tourism and investment.
This has led to the Siam Commercial Bank’s (SCB) Economic Intelligence Center (EIC) cutting its forecast for the country’s 2019 economic growth to 3.1 percent.
The EIC has revised downwards its Thai economic expectations in 2019 to 3.1 percent from 3.3 percent, largely as a result of the trade war between the United States and China which grew more severe in May as the United States increased its tariff on Chinese goods worth 200 billion US dollars from 10 percent to 25 percent, while China has responded by raising its tariffs on the United States’ products worth about 60 billion US dollars to 5-25 percent.

This has caused the global economy to slow down exponentially and affect Thailand’s export sector. The EIC has slashed its export growth estimate for the full year to a 1.6 percent contraction from the 0.6 percent projected earlier.
This also affects private sector investment which is likely to slow accordingly. Employment in the industrial sector will also be affected by shrinking exports. The EIC has also lowered its forecast for the number of foreign arrivals to 40.1 million this year, representing 4.8 percent growth, from 40.7 million projected earlier.
The Thai economy is still mainly directed by government spending especially intensive infrastructure investment which has caused the construction industry to grow by approximately seven percent, along with the benefits of economic stimulus measures in the past. But risk factors from the trade war and political uncertainty are still pressures.
So the new government must accelerate the injection of about 20 billion baht to stimulate the economy at the end of the year to help the economy maintain expansion.
Banking
BoT sees mild impact of new COVID-19 wave on the economy
The Bank of Thailand (BoT) does not see the new wave of COVID-19 infections as having as much of an impact on the economy as the first wave, as fewer businesses have had to be suspended.

BANGKOK (NNT) – Despite a new and wider wave of COVID-19 infections in the country, the Bank of Thailand (BoT) has assessed that the economic impact of the situation will not be as severe as the first wave as the effects of the virus are not as pronounced, and public health preparations, including plans for vaccination, are in place.
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Thailand’s Public debt to GDP ratio within framework says Finance Minister
Currently, Thailand’s ratio of public debt to gross domestic product (GDP) stands at 49.34 percent, which is below the Fiscal Sustainability Framework set at 60 percent.

BANGKOK (NNT) – The Thai economy is gradually recovering, with monthly economic indicators, such as the consumer confidence index and domestic spending, showing positive signs.
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Raising inequality posing credit risks for sovereign in APAC countries
Governments with weaker social protection systems and tighter fiscal positions will face tougher challenges in tackling income inequality

Moody’s Investors Service says in a new report that the impact of the coronavirus pandemic will exacerbate income inequality in APAC, posing credit risk for sovereigns across the region and in particular for those with weaker fiscal capacity and social protection systems.
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