BBL cuts economic forecast
Bangkok Bank has forecast that Thailand's economy will grow a measly 3 and 4 per cent next year, the lowest growth recorded since 2001, as a result of the global rise in oil prices, political uncertainty at home and a general slowdown in the world's major economies.
The bank predicts the country will see economic growth of around 4.3 per cent this year. It said Thailand has seen slow economic growth since the fourth quarter last year. Despite predictions that oil prices and the country's political situation are likely to be more stable next year, the economy is expected to feel the effects of slowdowns in the US, the European Union and Japan. The bank predicts this will hit the country's export sector next year, reducing economic growth. Bangkok Bank has come up with two scenarios for Thailand's economic outlook next year. In the most likely scenario, Thailand will register a 4-per-cent growth rate thanks to continued expansion of US, European and Japanese economies. This is based on the assumption that the US economy will slow down to a growth rate of 2.7 per cent. Meanwhile, the EU and Japanese economies are expected to see only slight falls growth compared to last year. But, if a new government is formed next year, public investment is expected to resume. Private investment and consumer spending is then predicted to expand by 4.2 per cent and 3.3 per cent respectively. However, political instability and delays in approving the central budget are expected to result in an expansion of state investment of only 2 per cent. Under this scenario, export and import growth is expected to slow to 9.8 per cent and 8.7 per cent respectively versus the 13.4 per cent and 8.9 per cent expected this year. Next year, Bangkok Bank expects the country to post a trade deficit of US$3.6 billion (Bt134 billion) and a current account surplus of $800 million. That's compared with the $4.5 billion trade deficit and $300 million current account expected for this year. The bank forecast the country's inflation at between 2.5 per cent and 3.5 per cent next year, compared to a predicted 4.7 per cent this year. In the worst-case scenario, Thailand's economy will expand by 2 to 3 per cent, if the US property sector bubble bursts, which could drag down the overall US economy. In this case export and import growth would drop to 0.5 and 0.8 percentage points respectively. This suggests Thailand would record a lower trade deficit of $2.9 billion and a high current account surplus of $2.1 billion. In this scenario inflation would hover between 1.5 per cent and 2.5 per cent.
|
