Thai boost seen from higher US rates
THE US Federal Reserve’s resolve to raise interest rates could fuel faster growth for Thailand’s economy, according to the joint standing committee for the private sector.
However, the US government’s threat to slap higher import duties on Chinese goods could send shockwaves through global trade.
The joint standing committee includes the country’s three most powerful private-sector organisations – the Board of Trade of Thailand, Federation of Thai Industries and Thai Bankers Association.
Chen Namchaisiri, chairman of the FTI, said the joint standing committee has agreed to maintain this year’s economic forecast at 3.5-4 per cent.
If the Fed raises the policy interest rate by 0.25 percentage point to 0.5 per cent, it could encourage more investment to flow to the US, while strengthening the US dollar and weakening the baht.
“If the Fed increases the policy rate, it should engender a positive outcome for the Thai economy, especially the export sector, as the baht could depreciate and that will result in better export competitiveness for Thailand,” Chen said.
However, the US’ plan to impose high tariffs against Chinese goods could cause a slowdown in China’s exports and indirectly stifle exports from Thailand to China.
Enterprises worry that they need to closely monitor what China will do against the US’ imposition of stiffer import duties as it could shake global trading.
Other concerns are the tensions between the US and Mexico and the political changes looming in a number of countries in the European Union.
Under the panel’s prediction for the country’s growth, outbound shipments are projected to expand by 1-3 per cent this year, while |inflation will be between 1 and 2 per cent.
