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Maybank KE Research may cut Thailand GDP growth forecast

Maybank Kim Eng Research may further revise down its 2014 Thai GDP growth forecast, currently at 3.25 per cent, if there are no solutions to the political deadlock by the end of the first half.

It said yesterday in Bangkok that it was likely that 2013 GDP would be below 3.00 per cent, with the fourth quarter expected at below 1 per cent, as economic activities continued to soften. The data will be released on February 17.

Exports in December rose 1.87 per cent to US$18.44 billion, in line with expectations, after falling in three months earlier. Imports totalled $18.72 billion, down 9.90 per cent, with the trade deficit at $290 million.

Last year, exports contracted 0.31 per cent to $228.53 billion, the first time since 2009 when exports fell 14.26 per cent. Imports edged up 0.29 per cent to US$250.72 billion, leaving a trade deficit of $22.19 billion.

Shipments of key agricultural products rose 4.90 per cent, while industrial products dropped 1.60 per cent.

According to the Bank of Thailand's figures for December, the private consumption index (PCI) fell 0.20 per cent on year as spending on durable goods - automobiles in particular - continued to contract in light of the high base and given a decline in new orders.

The private investment index contracted 8.10 per cent, given that most businesses had already accelerated their investment earlier and some businesses decided to postpone investment amid the economic and political uncertainties.

Thailand recorded its third straight current account surplus at $2.53 billion, given a positive trade balance.

The tourism industry expanded at a slower pace after the enforcement of China's new tourism law in October and amid domestic political unrest. Tourist arrivals were up 6.70 per cent from 11.90 per cent in November.

In its outlook report for Thailand, Maybank KE Research said it was now not easy to expect a further improvement in the current account.

While exports might have rebounded from the lowest growth, they have yet to fully recover.

"The outlook is being questioned now as the Chinese economy has been stabilising and political protests have resulted in large companies being reluctant to visit Thailand to negotiate new orders," it said as it forecast export growth of 4.00 per cent this year.

The tourism industry was adversely impacted by the political crisis.

"The sector is expected to suffer revenue losses of at least Bt82 billion in the first half of this year with visitors dropping by 1.8 million and threatening the full-year arrival target of 28.1 million, according to the Tourism Council of Thailand.

"Further revising down our 2014 GDP growth forecast (currently at 3.25 per cent) is possible if no solutions to the current political deadlock are found by year-end.

"We continue to expect the US dollar/Thai baht to rally to 34.00 by the end of the first quarter and to 34.50 by the end of the first half," it said.


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