BOT unfazed by 'Chinese realty bubble'
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The Bank of Thailand is not concerned much about the effect on the Thai economy from a possible bubble in China's property market, as the Chinese economy itself is not facing much of an impact, while it worries more about Europe's economic problems.
Any impact on Thailand from a bubble in China’s property market would be minimal, the central bank said.
Songtum Pinto, director of the Macroeconomic Analysis Office, said yesterday that the central bank did not have much to worry about from China as it was growing with relatively sound economic figures.
China’s gross domestic product expanded 8.1 per cent in the first quarter from a year earlier, the lowest growth since 2009, according to China’s National Bureau of Statistics.
The Thai central bank was more concerned about and closely monitoring the situation in Europe.
Europe’s economy may struggle to regain strength after shrinking 0.3 per cent in the fourth quarter of last year as governments toughen budget cuts, rising oil prices erode consumer purchasing power and global demand weakens.
The European Central Bank last month lowered its economic projections for both this year and next, forecasting a contraction of 0.1 per cent in 2012.
The economic problems in Europe are to be expected, given its struggling recovery.
“We see Spain as one of the countries surrounding the main industrialised countries [in the euro zone] that could face some problems. The main countries [in the euro zone] have not had problems,” Songtum said.
Europe’s expected economic slowdown could affect Thai exports, he said. However, the central bank forecasts exports to grow 7-8 per cent this year. All factors are already included in its forecast.
The recent slowdown in Thai exports resulted from the floods. The problem was on the supply side, not demand side.
“Asia has been affected by the major industrialised countries but made relatively good adjustments through intra-regional trade or an increase in domestic demand.
“However, the world is interconnected and impacts continue to exist. So we expect the global economy to slow down from last year,” he said.
