• 
• 

A UOB KayHian report yesterday said the gloomier macroeconomic outlook had prompted its economic team to aggressively downgrade Thailand's economic growth projection for next year.

It has scaled down projected growth from the previous 3.2 per cent to only 0.5 per cent.

"The recent political blow-out, which resulted in a temporary shutdown of both international airports, will have serious implications for the Kingdom's economic outlook," UOB KayHian said.

DBS Global Research issued a report yesterday cutting its growth forecast for Thailand in 2009 to 1.5 per cent, from the previous prediction of 3.2 per cent. The 2008 growth forecast has also been revised downward, from 4.9 per cent to 4.4 per cent.

"The reduction in growth comes mainly from a weaker fourth quarter of 2008 and first quarter of 2009, led by a disappointing export performance," it said. "In Thailand's case, domestic political developments are also a concern. If the Democrats come back to power, it is possible that we will see a resolution to the political crisis, but it is too early to be sure about this."

DBS Global Research also cut the 2009 inflation forecast for Thailand to 1.2 per cent from the earlier 3 per cent. This mainly reflects possible price declines in the current quarter and first quarter of 2009, as a result of falling commodity prices and weak domestic demand.

With rapidly slumping global demand and a corresponding collapse in crude oil and other commodity prices, inflation rates worldwide are coming down.

JPMorgan has also revised its Thai inflation forecast downward.

"For Thailand, our economics team cuts the 2008 estimated inflation rate forecast from 6.2 per cent to 5.6 per cent and, more dramatically, the 2009 estimated rate is cut from 2.4 per cent to only 0.5 per cent," it said.