THURSDAY, March 28, 2024
nationthailand

BOT slashes GDP view on export slump

BOT slashes GDP view on export slump

THE tough times facing exporters have prompted the Bank of Thailand (BOT to slash its forecast for economic growth this year by half a percentage point to 3.3 per cent.

Exporters have struggled as the country’s trade partners endure slowdowns of their own and the effects of the trade war between China and the United States play out.
The central bank expects no growth in the value of exports this year, in contrast to an earlier projection of a 3 per cent gain. Imports are forecast to go into the red with a contraction of 0.3 per cent, against an earlier call of 3.1 per cent growth.
For next year, the BOT is pencilling in economic growth of 3.7 per cent, down from an earlier projection of 3.9 per cent.
To shore up economic growth, the BOT’s Monetary Policy Committee (MPC) unanimously decided to hold its policy rate steady at 1.75 per cent at its meeting yesterday, said Titanun Mallikamas, secretary to the MPC.
The low real interest rates could encourage financing by the private sector to continue expanding, he said. The central bank also expressed concerns over the baht’s appreciation, which might not be consistent with Thailand’s economic fundamentals. It would closely monitor developments in exchange rates and capital inflows, Titanun said.
The central bank also revised down its projection for expansion in private investment this year to 3.8 per cent, from 4.4 per cent, and private consumption to 3.8 per cent, from 3.9 per cent estimated earlier.
However, the relocation of production bases to Thailand and public-private partnership projects for infrastructure could support investment in the period ahead, Titanun said.
Private consumption could be restrained by elevated household debt with signs of moderation in earnings and employment in the export-related manufacturing sectors, he said.
Public spending was expected to grow at a slower pace than earlier estimated due to a likely delay in the enforcement of the annual budget expenditure for fiscal 2020 and the postponed investment in some state enterprises, he said. The estimate for growth in public investment this year was slashed to 3.8 per cent from 6.1 per cent, while the expected government consumption was cut to 2.2 per cent from 2.3 per cent.
 

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