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Thailand’s economic growth rate (GDP) for the whole year in 2015 will be 3.5 percent compared to last year’s 0.9 percent, according to the latest forecast of the World Bank.
World Bank’s director for Southeast Asia Mr Urich Zakao said today that the only factors attributing to this year’s forecast of higher growth rate compared to last year’s are declining global oil prices, higher revenues from tourism industry, increased government’s spending and gradual increase of exports.
Due to lower competitiveness, the World Bank pointed out that Thai exports which grew by an average of 13 percent per annum during 2006 and 2011 started to contract since 2012. The share of Thai exports in the world’s export market also contracted accordingly.
Earlier this week The Bank of Thailand has readjusted its projection for economic growth to below 3.8% as a result of faltering exports, slow and fragile recovery of Thai economy.
Thai economic recovery remains slow and fragile
In April 2015, the Thai economic recovery continued to be slow and fragile, said the BoT in its latest Press Release on the Economic and Monetary Conditions for April 2015.
Households and businesses were cautious about spending and merchandise exports were sluggish in line with subdued regional trade caused by the slowdown in the Chinese economy.
Mr Zakao, however, said that Thailand could regain its competitiveness if the Thai labour’s skills and productivity are increased.
While access to education among Thai children and youths has increased substantially for the past 25 years when only 10 percent of them had access to secondary education compared to 70 percent today, he suggested that the quality of the Thai education should also be improved as well.
Thailand’s looming deflation risk
Thailand has reported its fifth straight month of deflation, its longest run since the global financial crisis, reported today the Financial Times.
Thai consumer prices fell 1.27 per cent year on year in May, exceeding consensus expectations and deepening the rate of decline from the 1.04 per cent figure reported a month earlier.
Earlier this month, the Office of the National Economic and Social Development Board cut its GDP growth forecast for this year to 3-4% from an earlier prediction of 3.5-4.5%.
It stated that the downward revision was mainly from the drop in export values following the falling global oil and farm prices.
It also expects Thailand to post only 0.2% growth in exports in 2015 from earlier projected 3.5%, while household consumption will expand by 2.3%.
Read more at https://www.thailand-business-news.com/economics/50786-thai-exports-shrink-for-the-fourth-consecutive-month.html#2FqmLbFlCu2R6pA7.99