FRIDAY, March 29, 2024
nationthailand

KResearch cuts its Thai economic growth forecast

KResearch cuts its Thai economic growth forecast

Kasikorn Research Centre (KResearch) has revised downward its Thailand economic growth forecast for 2019 from 3.1 per cent to 2.8 per cent, while predicting that the economy may grow at less than 3.0 per cent next year amid numerous negative factors.

Assistant managing director Nattaporn Triratanasirikul said the downgrade in GDP growth was in line with the global economic slowdown, which caused the country’s exports during the first eight months of 2019 to see a worse-than-expected contraction, as witnessed in various product categories and in most major markets. 
“KResearch has therefore cut our export projection to a range of -2.0 to zero per cent, from zero per cent previously,” Nattaporn added.
For the 2020 outlook, several global challenges will weigh on the kingdom’s exports, which will be a crucial factor in shrinking the growth of Thailand’s GDP to less than 3 per cent. 
This projection is based on an estimate of present conditions, and excludes the government’s economic stimulus measures. 
However, the government’s Bt1,000 “Eat, Shop, Spend” handout programme may lift the country’s GDP by 0.02 per cent this year. But it remains to be seen whether the government will launch additional fiscal measures to boost the economy next year. 
Any such measures should focus on workers lacking a social safety net, such as freelancers or small and medium enterprise entrepreneurs, who may see a drop in sales after customers become more cautious in spending, Nattaporn said.
As for monetary policy, the Bank of Thailand’s Monetary Policy Committee may further cut the policy rate in the near future. Nonetheless, monetary measures would only gradually produce a positive effect on the economy, Nattaporn added.
KResearch assistant managing director Siwat Luangsomboon expressed the view that the protracted US-China trade dispute may trim Thai exports by an additional $1 billion-$2.5 billion (Bt76.3 billion) in 2020 after the US imposed tariffs on Chinese imports, compared to $2.1 billion-$3 billion projected for 2019.
Although Thailand would likely see some benefit from the relocation of production bases to this country, such relocation may primarily be seen in industries among which foreign companies already have production bases here in Thailand, Siwat said.
Regarding Brexit, it is highly likely that the UK will leave the European Union without a deal, he said. 
The next step is the UK and the EU would have to negotiate on the format of any free trade agreement and the border issue with Northern Ireland. These developments may affect global financial markets, while the impact of Brexit on the Thai economy should be limited, Siwat added.

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