SCB foresees 5% export growth, in worst case

 

 

The Economic Intelligence Centre said that in the base case scenario, the growth rates for the years would be 8 per cent and 11 per cent, respectively.

"Industries that will be significantly affected include food, electronics and electrical appliances and chemicals and plastics. Furthermore, reduced prices of commodities will negatively affect the rubber and steel industries," said Sutapa Amornvivat, chief economist and executive vice president of Siam Commercial Bank.

At the briefing today, she admitted that the economic condition of Thailand's trade partners are more fragile than expected. 

  “The Chinese economy, especially in the manufacturing sector, has slowed down, as seen from the PMI New Orders index which has continued to shrink despite the government’s various domestic spending stimulus packages in the last 3 months. The continued drop shows that China relies heavily on the European economy. For the next 23 months, the European economy will continue to face risks from its negotiations on the conditions of Greek financial aid as well as from the European Central Bank policies in reducing the borrowing costs for Spain and Italy. These risks may prove to be a key turning point that causes the Eurozone to contract more than expected. On the other hand, the US economy is still too weak for the global economy to rely on”. 

Given the gloomy outlook, inflationary pressures will likely decrease next year, as oil prices are unlikely to increase from this year's level. The EIC forecasts headline inflation for 2013 at 3.3 per cent. As such, the policy rate should not be increased in the year.