Ongoing political uncertainty, exports slump, rising household debt and a lack of reform momentum are now increasingly seen as likely to undermine Thailand’s economic growth.
Thailand’s sluggish economic recovery and the depression in the global economy have prompted the Bank of Thailand to cut its GDP growth forecast for the full year to slightly below 3%
In the second quarter of 2015, the Thai economy recovered at a pace close to the previous meeting’s assessment. Nevertheless, going forward, the economic outlook was subject to more negative factors, leading to a slight downward revision of the growth projection for 2015 from the previous meeting.
said the BOT
The National Economic and Social Development Board (NESDB) also stated that the Thai economy slowed to 2.8% growth in the second quarter, down from 3% in the first quarter, while Credit Suisse expects full-year GDP growth of 2.5% for the country.
NESDB also predicts exports will contract 3.5 percent from an earlier estimate of a 0.2 percent gain and government spending will rise 11.6 percent in the second half.
“The yuan devaluation is not good news for Thailand, as it will put more pressure on our exports,”
Pimonwan Mahujchariyawong, a Bangkok-based economist at Kasikorn Research Co., said to Bloomberg News Agency.
Household debt reaches 80% of GDP
The National Economic and Social Development Board (NESDB) says household debt has risen 6.4% to 10.57 trillion baht in the first quarter of this year, while credit card defaults also rose 28%in the second quarter.
NESDB secretary-general Arkhom Termpittayapaisith said household debts in the first quarter of 2015 stood at 10.57 trillion baht, representing a 6.4% growth or 79.9% of GDP.
Meanwhile unpaid bills of consumers credits in the second quarter also rose 7%, while debt payment defaults also shot up 15.5%.
But significantly credit card defaults also increased to 28%, though still not yet reaching alarming rate, but need close monitoring of defaults, he said.
Thailand is among the most rapidly ageing countries in the world
The UN has projected the share of people older than 65 years of age in Thailand will increase from 10.5% of the population this year to 19.5% and 25.9% in 2030 and 2040, respectively. Thailand will become a super-aged society by about 2030.
Political climate in Thailand to remain highly volatile
A risk of renewed political instability that poses a salient risk to investors and businesses. In addition, the insurgency in southern Thailand is also a threat, the unit of Fitch group said in a report entitled “Political Risk Analysis: Political Risk to Investing in Thailand”.
Investors may suffer from renewed instability and the policy uncertainty that comes with it.
Thailand relaxes COVID-19 measures to help revive economy
During the past couple weeks, new infection cases have been down from roughly 20,000 daily cases to 17,000 -19,000. Moreover, the number of daily discharges is exceeding infections, which has led to the conclusion that the situation is improving.
Thailand relaxed more virus related social curbs on September 1st, in dozens of cities including Bangkok, in a move that may indicate that the country’s economy, hit hard by COVID-19 will soon revive, lead by the export sector and sound financial fundamentals.(more…)
Southeast Asia to relinquish its lead over Latin America says Moody’s
While the emerging economies of Southeast Asia have outperformed their counterparts in Latin America for most of the past two decades, their lead will slide in the next few quarters as Southeast Asian governments clamp down to fight the pandemic’s lingering second and third waves.
The Delta surge is casting larger clouds over the global recovery and emerging markets are in the thick of it. Despite the ebbing of the coronavirus variant in India, where it first emerged, its spread in Southeast Asia, Africa, and the Middle East has steepened the road to recovery in these regions.(more…)
Thailand maintains Emergency Decree while easing Covid-19 restrictions
The Center for COVID-19 Situation Administration (CCSA) has extended the Emergency Decree until November 30th, but further relaxed some measures.
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