Kasikorn Research Center yesterday lowered the country’s economic growth projection from 4% to 2.8%. Earlier this week, the central bank of Thailand had revised its economic growth projection to 3.8%, down 0.2% from 4% previously.
Mrs Pimolwan Mahatchariyawonghe, assistant managing director of Kasikorn Research Centre or KResearch, said the research think tank has lowered its GDP prediction for the year down to 2.8% from the previously forecast 4%, as exports are showing signs of decline.
Dropping commodity prices and sluggish exports
According to the center, the less-than-expected global economic growth and dropping commodity products prices are the main factors behind the sluggish performance in the export sector. The center anticipated exports to decline 3.9% growth in the first quarter.
The centre anticipated exports to decline 3.9% growth in the first quarter.Other reasons affecting the economic growth in first quarter included weak consumer spending, and slowdown in investment from the private sector.
However, she predicted that tourism, the government’s economic stimulus policies, and low inflation would likely help the nation’s economy to recover sooner than expected.The centre predicted no growth for exports this year, down from 3.5 % projected earlier. Imports would also be down from 5% to 3.5 %, and inflation down to 0.5% from 1.5% predicted earlier.
BoT growth projection to 3.8%
Earlier this week, the central bank of Thailand has revised its economic growth projection to 3.8%, down 0.2% from 4% earlier, after the country faced slow growth in the fourth quarter last year.
The Bank of Thailand (BoT) now projects growth at 3.8 % from 4 percent earlier. BoT assistance governor for Monetary Policy Mathee Supapongse said Friday that the GDP forecast cut is based on a slower than expected growth in the fourth quarter in 2014.
According to the statement released by the BoT earlier
The Thai economy is projected to recover more slowly than previously assessed as a result of weaker-than-expected domestic spending while inflationary pressure is projected to decrease from previous forecast mainly from lower world oil prices. Major developments contributing to the MPC’s forecast revision include
(1) the slower-than-expected global economic recovery due to growth moderation in China and Asia,
(2) lower-than expected domestic demand in Q4 2014 and January 2015,
(3) more delays to government spending than expected, especially in public investment, and
(4) lower-than-expected world oil prices
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According to an article published today by Joshua Kurlantzick
A recent Bloomberg analysis of the growth rates of major Southeast Asian economies showed that, since 2010, Thailand’s GDP growth rate has been about half that of neighboring Malaysia, Indonesia, and the Philippines. And in 2015, the World Bank projects that Thailand’s growth rate will again be the lowest in the region.
Thailand’s central bank last week cut its own forecast for Thailand’s 2015 growth rate. Expect it to cut that forecast further as the year progresses.
Economic growth in Asia to remain strong
The Asian Development Bank (ADB) predicted on Tuesday that Asia will sustain last year’s 6.3% growth rate for another two years, with the slowdown in China — the region’s biggest economy — expected to be offset by lower oil prices and improvements in India, Southeast Asia and the U.S.
The combined gross domestic product growth of Southeast Asian nations slowed to 4.4% last year, but will pick back up to 4.9% this year and reach 5.3% in 2016, the first full year of the Asean Economic Community.
Indonesia and Thailand are expected to lead regional recovery, and the other eight ASEAN members should also benefit from rising exports and lower inflation.
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Bangkok Correspondent for Siam News Network. Editor at Thailand Business News
