The Bank of Thailand will next month lower its estimate for 2013 economic growth amid concerns that a slowdown in China will hurt Thai exports.
BOT Governor Prasarn Trairatvorakul told Reuters that exports could be affected by the economic slowdown in China, Thailand’s major trading partner.
“[Thailand’s] economic growth forecast will be revised down from 5.1 per cent internally. The revised figures will be formally announced in the report on July 19,” Prasarn said.
Expectations of a lower growth forecast came after gross domestic product in the first quarter expanded by less than expected at 5.3 per cent year on year, amid slow export recovery and higher risks to growth.
Such concerns about an economic slowdown had prompted the Monetary Policy Committee to slash the policy interest rate by 25 basis points to 2.50 per cent in its last meeting after holding the rate for four consecutive meetings.
The MPC members will convene on July 10 and announce the revision of economic figures on July 19.
Prasarn said: “The Thai economic slowdown is clearly seen in consumption and investment. China’s economic slowdown could partly have an impact on Thai and Asian exports.”
Bloomberg quoted Tohru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute in Tokyo, as saying: “Weak data out of China has raised concerns about the region’s exports as Asia’s economy depends a lot on sales to China.”
China’s exports rose 1 per cent in May after an increase of 14.7 per cent in the previous month, according to Bloomberg.
In April, the BOT raised its estimate for the Kingdom’s GDP in 2013 to 5.1 per cent from its earlier projection of 4.9 per cent on better-than-expected growth in the fourth quarter of 2012. The baht appreciated to a 16-year high and raised concerns of an export slowdown. Prasarn said the baht now was weakening against the US dollar and its movement was close to its regional peers’.