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Economy may expand only 2.5% on political instability: KResearch

The Thai economy, reeling from high political uncertainties, will face severe downside risks next year and may register only 2.5 per cent growth rate in the worst-case scenario, Kasikorn Research Centre said.

In its research note, KResearch noted that if the political stalemate continues until the second half of 2014, domestic consumption, investment and public spending could be disrupted. In this scenario, though the export sector would pick up, the economic growth should not exceed 2.5 per cent.

In the base case scenario, the research house forecasts the 3.7 per cent growth rate.

The Thai economy has been slowing down throughout 2013. KResearch expects the full-year growth of only 2.7 per cent, compared to 6.5 per cent in the previous year. The export sector should contract for the first time in four years, with the 0.3 per cent contraction rate, despite the weakening of the baht against US dollar in the latter half of the year.

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