WB urges deeper Asean links amid growth risks
THE World Bank sees Thailand’s economic growth trending just shy of 4 per cent over the coming years, but warns of threats in the form of regional security issues and trade protectionism.
Coinciding with the launch yesterday its East Asia Pacific Economic Update, the World Bank urged the country and its Asean neighbours to deepen regional cooperation to offset such threats.
The institution projects growth in the broader region of 6.4 per cent this year due to a recovery in world trade and increasing agricultural production. “Growth in developing East Asia and the Pacific has generally remained robust,” Sudhir Shetty, World Bank chief economist for the East Asia and Pacific region, said in Bangkok.
For Thailand, economic conditions are more favourable than in the past, with gross domestic product growth expected to be 3.5 per cent this year, according to the report. “Average growth in Thailand could be 3.8-3.9 per cent from this year through to 2019,” Sudhir said at the presentation of the report.
Oil prices have increased gradually and it is unlikely to hurt oil-importing countries such as Thailand, he said, referring to crude oil prices rising close to US$60 a barrel. There are, however, significant risks to the positive outlook, warned Sudhir.
The uncertainties in US economic policy could lead to trade protectionism as well as geopolitical tension in the region, he said, adding that the South China Sea was a point of potential concern.
Thailand and other countries in the region should deepen economic integration in order to offset the threats from trade protectionism and geopolitical tension, he said.
Asean countries should lower non-tariff trade barriers and facilitate cross-border trade. Also, they could deeper economic integration under the regional comprehensive economic partnership, Sudhir said.
He also pointed to a possible tightening of global financial conditions as monetary policies in the US and the euro area normalise, while levels of private sector debt continued to rise in developing East Asia and the Pacific.
Another concern is that budget deficits are high in many countries, such as Indonesia, the Philippines, Malaysia, Vietnam, Cambodia and Laos. He said public debt was less of a concern in Thailand, given the government’s infrastructure spending.
