UTCC revises forecast for economic growth down to 3.8 per cent
The University of the Thai Chamber of Commerce (UTCC) has cut its economic-growth forecast for the year from 4.5 per cent to 3.8 per cent on worsening factors, particularly politics.
UTCC now sees gross domestic product at Bt8.3 trillion, down from Bt8.45 trillion forecast earlier.Investment growth is expected to slow sharply to 1.2 per cent, while private consumption will increase only 2.4 per cent instead of 3.8 per cent. Industry is expected to show 4.5-per-cent growth, down from 5.6 per cent predicted before, and agriculture should pick up by only 2.7 per cent instead of 3.8 per cent. The Bank of Thailand on Tuesday also lowered its economic-growth forecast, from 4.3-5.8 per cent to 3.8-4.8 per cent, on slipping business confidence and consumption. Thanawat Polvichai, director of the university's Economic and Business Forecasting Centre, yesterday said negative factors included the ongoing political uncertainty; the global economic slow-down, especially among major trading partners; rising oil prices; a strengthening baht; and the southern unrest. World trade is expected to grow 7 per cent instead of the previous forecast of 7.6 per cent, while the US economy is expected to expand 2.2 per cent instead of 2.9 per cent. The average oil price is expected to be US$63 (Bt2,200) per barrel, up from a previous assumption of $61.50. The baht is now expected settle at 35 to the US dollar instead of 36.30. Thanawat said the downgrade reflected danger signals for the economy, which he said could go downhill if the government failed to take any stimulating measures now. "The government must accelerate recovery of the economic growth of the country before the situation worsens," he said, adding that if the situation remained unchanged, economic growth would sink to its lowest level next quarter. To boost the economy, which is expected to recover by the fourth quarter, the government should accelerate budget disbursement, launch mega-project bidding, slash the policy rate another 0.5 percentage point this quarter and stabilise the baht's value at above 35 to the dollar, he said. The national election should be held this year, because continuing political instability will drag everything down, particularly investment growth, he said. The deteriorating situation in the deep South has also increased worries among both Thai and foreign enterprises, he said. Despite the gloomy prognosis, Thailand is expected to enjoy a trade surplus of $4.4 billion and a current-account surplus of $5.9 billion this year. The centre forecasts total exports rising 10 per cent to $141 billion and imports increasing 8.4 per cent to $136 billion.
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