New MPC figures see flat 2014 export growth

It also lowered its 2015 export-growth forecast of merchadise from 6 per cent to 4 per cent. 

The MPC also lowered its forecast for next year’s growth in gross domestic product from 5.5 per cent to 4.8 per cent. It said the slow recoveries of exports and tourism were projected to continue into 2015 because the export sector could be further affected by supply constraints, while the prolongation of martial law has deterred travellers from visiting this country.

However, the MPC maintained its GDP growth projection for 2014 at 1.5 per cent, noting that stronger-than-expected domestic demand was helping compensate for weak export performance. Meanwhile, increased government spending in the final quarter of 2014 and the planned investments on infrastructure should encourage private investment and help drive the economy next year.

Mathee Supapongse, assistant governor of the BOT and secretary of the MPC, said the lowered GDP projection for 2015 came from “the slower-than-expected export recovery this year, which will likely continue next year, since the sector has experienced structural problems for quite some time and we could not gain the same benefit of the recovery of the global economy as we did before”. 

He said the second factor was the tourism industry, “which was affected by continued caution over domestic and international political situations, which could also carry over into next year”.

Martial law “could also affect the tourism sector next year, since tourists in Europe and America have to plan in advance before coming here, and they will be looking at the current situation, which could affect their decision-making”. 

The MPC changed its 2014 projections for growth of private consumption from 0.2 to 1.1 per cent; private investment from minus-2.6 to -2.8 per cent; public consumption and spending from 2.8 per cent to 4.1 per cent; and export of merchandise and services from plus-2.5 to minus-0.4 per cent. Next year’s projections were changed from 4.7, 11.2, 4.9 and 7.6 per cent to 4.0, 10.2, 5.1, and 5.7 per cent respectively.

Pimonwan Mahujchariyawong, deputy managing director of Kasikorn Research Centre, said KResearch’s projection for export growth this year would be revised when the real export numbers and the government’s economic stimulation policies are announced next week. Its revised figures would likely be along the same lines as the MPC’s new projections, since it has seen the same problems in the export sector and does not believe exports will grow by more than 1 per cent in 2014 and no higher than 5 per cent in 2015.