Global slowdown US and EU debt woes to limit Thai growth in 2012 seminar hears
Play
Economists have warned that slower global growth and the problem of high debt in key markets will restrain the Kingdom
<p>
</p>
<p>
</p>
<p>
</p>
<p>
<span lang=\"EN-GB\">At yesterday’s "Economic direction in 2012" seminar, panellists expressed the view that although the Thai economy is expected to continue to expand next year due to the government’s plan to boost domestic consumption, global economic sluggishness will limit the extent to which the economy will grow.</span></p>
<p>
<span lang=\"EN-GB\">Kosit Panpiemras, a former deputy prime minister and the executive chairman of Bangkok Bank, said the United States and European Union economies would be trapped in slower growth and high liabilities throughout 2012. The situation will result in a slower expansion of the world market, which will in turn affect the Thai economy.</span></p>
<p>
<span lang=\"EN-GB\">Although the overall Asian economy will continue to expand, lessening the negative impact of slower growth in the West, giant markets like China and other emerging countries are also faced with the problem of high inflation.</span></p>
<p>
<span lang=\"EN-GB\">Kosit said that as China was greatly concerned about spiking inflation, it would be unable to shoulder the burden of the sluggish global economy as much as it had done during the previous crisis in 2008. China will only be able to maintain growth and will have to be cautious over budget spending to boost its economy.</span></p>
<p>
<span lang=\"EN-GB\">Linked as it is to the US, EU and Chinese economies, Thailand will inevitably be faced with slower growth, he said. To ensure the Kingdom’s expansion next year, Kosit said the government must carefully implement economic policies and have measures in place to handle a slowdown.</span></p>
<p>
<span lang=\"EN-GB\">Deputy PM and Commerce Minister Kittiratt Na-Ranong expressed great concern about the US and EU economies, as their problems would have both a direct and an indirect impact on Thai exports next year.</span></p>
<p>
<span lang=\"EN-GB\">However, he is confident that gross domestic product will still grow by more than this year’s estimated 4 per cent, thanks to government measures focused on boosting the domestic economy.</span></p>
<p>
<span lang=\"EN-GB\">He said the plan to stimulate domestic consumption would add 2.5 percentage points to GDP growth. </span></p>
<p>
<span lang=\"EN-GB\">Kittiratt also reaffirmed that the government would not increase the rate of value-added tax next year. However, the government expects to collect more revenue following the policies to boost the incomes of labourers and farmers, which will increase consumer spending and domestic trading.</span></p>
<p>
<span lang=\"EN-GB\">Payungsak Chartsutipol, chairman of the Federation of Thai Industries, said slower growth in the US and the EU could affect Thai exports and economic growth next year.</span></p>
<p>
<span lang=\"EN-GB\">"Although Thailand’s exports are currently focused more on the Asean market, Asean also relies on trading with the US and the EU," he said. </span></p>
<p>
<span lang=\"EN-GB\">Asean sales to the US account for 32 per cent of the grouping’s exports, with the EU contribution accounting for another 13 per cent. </span></p>
<p>
<span lang=\"EN-GB\">Payungsak said some exporters reliant on those economic giants would be negatively affected next year. However, he is confident the Thai economy will continue to grow by at least this year’s estimate of 4 per cent, due to the intensive measures aimed at boosting domestic consumption.</span></p>
<p>
<span lang=\"EN-GB\">Thanavath Phonvichai, director of the Economic and Business Forecasting Centre of the University of the Thai Chamber of Commerce, said the global economy faced a high risk of stagflation – a combination of economic stagnation and high inflation – as many countries have unclear solutions for solving the financial crunch.</span></p>
<p>
<span lang=\"EN-GB\">He expects the Thai economy will grow by 3-4 per cent next year, while the global economy will expand by 2-4 per cent. However, the domestic economy could grow by less than 3 per cent if the global economy entered a recession.</span></p>
