Growth forecasts chopped on political impasse
DBS Group expects Thailand's economy to expand below 2 per cent this year, following the quarterly contraction and forecast revision by Thailand's think tank, the National Economic and Social Development Board (NESDB).
The NESDB today announced that it has revised down its 2014 economic growth forecast to 1.5-2.5 per cent. It is a sharp drop from the previous estimate of 3-4 per cent. The revision followed the 0.6 per cent contraction in the first quarter, following a slump in consumption and investment in light of political impasse.
DBS’s initial growth estimate was 3.1 per cent.
In line with the slowing economy, the inflation is expected to ease further. DBS’s inflation forecast for this year is revised from from 2.9 per cent to 2.7 per cent.
"Both private consumption expenditure and investment growth underperformed our expectations, signalling that the impact from the current political impasse on the economy may have been greater than we had initially thought," said the house’s economist Gundy Cahyadi.