BOT adjusts down GDP estimation


The Bank of Thailand’s (BOT) Monetary Policy Committee adjusted down its estimation of gross domestic product (GDP), stipulating that in 2022 the economy would expand by 3.2 per cent instead of its previous 3.4 per cent estimation.

It also adjusted down its GDP expansion forecast for 2023 from 4.7 to 4.2 per cent.

BOT director of Economics and Policy Sakkapop Panyanukul said on Tuesday the positive factors that would contribute to GDP expansion in 2022 include increased consumption, recovering tourism and improved confidence by the private sector due to an increasing number of the population being vaccinated.

These positive factors are likely to contribute to economic expansion by 0.4 per cent.

“However, negative factors such as lower demand for Thai exports due to the ongoing Russia-Ukraine conflict, increased global energy prices, and the prolonged battle against Omicron could drag down GDP expansion by up to 0.6 per cent, prompting BOT’s Monetary Policy Committee to slash its GDP expansion prediction by 0.2 per cent,” he said.

Sakkapop said the committee might have to further adjust down the forecast in case more negative factors emerged or existing ones became more worse than estimated.

“For example, the impact of the Russia-Ukraine conflict could cause global supply disruption, as Russia is one of the world’s major iron producers,” he said.

“Furthermore, the rising cost of living due to the increased energy price could affect private consumption and operational costs of many businesses, while the possible emergence of a new Covid-19 subvariant could affect the country’s recovering tourism industry in the second half of the year.”

The central bank also estimates that inflation throughout the year will remain at 4.9 per cent.

“Inflation could rise to 6 per cent during the second or third quarter, but it will gradually subside in the last quarter due to the decreasing energy price,” Sakkapop predicted.