Speed up infrastructure investment to boost growth: HSBC
Play
The Thai government should speed up on infrastructure investment if wanting to lift the economic growth in a substantial way, said HSBC.
In a research note, the bank's Bangkok unit said that the investment would give the economy a bigger boost compared to stimulus measures aimed to increase domestic spending.
"A weightierboost could come from the transport infrastructure investment master plan, as the government’s June estimate
showed disbursements of around 2 per cent of GDP being planned for 2016. Yet, the speed of execution has been slow so far, and the new Cabinet’s order for a review before prioritising the projects may cause a short-term delay," noted its economist, Nalin Chutchotitham.
Though such investment would keep budget deficits near 3 per cent of GDP in the next few years, she said public debt is expected to remain below 50 per cent of GDP through 2017.
HSBC recently downgraded the 2015 GDP growth forecast to 2.6 per cent from 3.1 per cent. Asian Development Bank this week also lowered the forecast to 2.7 per cent.
