ADB to cut Thai growth forecast, but stresses future potential
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The Asian Development Bank intends lowering its forecast for this year's Thai economic growth, but suggests the country has the potential to upgrade its economy to become a high-income nation in the next 30 years.
Senior country economist Luxmon Attapich yesterday said the ADB would follow other research houses, which have already revised downward their forecasts for the Kingdom’s gross-domestic-product growth.
The ADB previously projected that GDP this year would expand by 4.9 per cent, but now believes that due to the export slowdown, growth might come in at only 4-4.3 %, she said, adding that the bank will update its Thai economic forecast in October.
However, the economy is likely to rebound next year if the government begins to make progress with its Bt2-trillion infrastructure project, she said.
Meanwhile, a recovery in the US and China economies in the second half of this year should boost Thailand’s exports.
She is less concerned about the current financial-market turmoil across Asia, saying that Thai economic fundamentals remained sound and the country had a relatively strong financial sector.
“Money outflow from Thailand will be less severe than that from other emerging countries,” she said.
Meanwhile, Jesus Felipe, adviser to the economics and research department of the ADB, emphasised that Thailand and other emerging countries in Asia had the potential to become high-income countries if they could lower their share of employment in the agricultural sector.
Currently, more than 700 million workers work in farms across Asia.
In Thailand, the agricultural sector accounts for 40 per cent of the labour force, which is too high a proportion, he said. “The share of employment in agriculture should not be higher than 5 per cent,” he said.The Kingdom’s current output of agricultural products is less than 10 per cent of GDP.
“Secondly, Thailand needs to double its labour force in industry from the current level of 15 per cent. It should be increased to 30-35 per cent of the labour force,” he said.
Lowering the number of workers in the agricultural sector and increasing their number in industry will result in higher productivity for the whole economy, he stressed.
Thailand and other Asian countries also have to move up the development ladder further to become services economies, Felipe said.
