China's slowdown closely monitored
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The Bank of Thailand has closely monitored China's economic development, as the world's second largest economy has felt the pinch from the euro crisis.
Songtham Pinto, director of the Macro-Economy Division, said that China's meagre 1 per cent export growth in July is within the central bank's expectation. He admitted that China's export slowdown would hurt Thailand's economy, as China is a major trade partner of the Kingdom.
"This is well within the Monetary Policy Committee's expectation. It explained why the gross domestic product forecast was revised downward. We started to see the negative impacts of the euro crisis on our trade partners. These would only grow in the second half. We monitor the situation on a daily basis," he said.
Government data last week showed that China's exports grew 1 per cent after climbing 11 per cent in June, missing the 8 per cent median estimate of economists surveyed by Bloomberg. Policy makers cut interest rates in June and July after two reductions in banks' reserve-requirement ratios this year as the economy expanded at the slowest pace since 2009. Some economists said that China's economic growth would slow down considerably, from the average 10 per cent growth rate in the past 10 years.
The MPC at the July 25 meeting revised downward Thailand's 2012 economic growth projection from 6 per cent to 5.7 per cent. Next year's projection is also cut from 5.8 per cent to 5 per cent.
