THE country’s peak private-sector advisory grouping is sticking with its estimates for the economy to grow as much as 4.5 per cent alongside an increase in exports of up to 8 per cent for this year after economic gauges in the first quarter pointed to sustained momentum.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) held firm on the projections at its May meeting. The low end of its estimated range for growth in gross domestic product is 4 per cent and, for exports, 5 per cent.
Suphan Mongkolsuthree, the Federation of Thai Industries’ (FTI) chairman who chaired the JSCCIB meeting this month, said that exports and tourism had continued to expand. The committee expects economic expansion of 4 per cent for the first quarter of this year.
Suphan flagged as areas of concern the disputes between the United States and many of its trading partners, the uncertainties over the future of a deal to curb Iran’s nuclear plans, and the pace of increases by the US Federal Reserve in its benchmark interest rates.
The JSCCIB expects, at least initially, a limited impact from the trade disputes on Thai exports in 2018, adding that the Fed's rates decisions could increase volatility in currencies, Suphan said.
He said that the JSCCIB would monitor progress on investments in Thailand, particularly those by the government on infrastructure projects that could begin to flow in the second and third quarters – the latter half of this fiscal year. The committee would also keep an eye on movements in the prices of agricultural products.
The JSCCIB has expressed concern over a proposal by the Federation of Accounting Professions to the National Accounting Body (NAB) for a switch to the TFRS9 accounting standard at the start of next year.
The JSCCIB said expected to see “high impacts to Thailand's economy” from the proposal and has written to NAB to request that the implementation date be moved back to January 1, 2022. It wants the NAB and related public agencies to take time to study the impact of the change in accounting standards in all its dimensions.
The committee has also urged the state sector to invite businesses, such as those in the leasing and hire purchase fields, to join a proposed subcommittee to study the potential of impact of the change.
Meanwhile, the public sector should accelerate the consideration of Thailand's position – looking at the advantages and disadvantages – to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said Suphan. This was needed so that Thailand would not lose an opportunity to gain benefits from the free-trade agreement.
The CPTPP is a trade deal that has been agreed in principle between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Separately, TMB Analytics forecasts that the Monetary Policy Committee will increase the policy rate in the second half of this year, after the country’s inflation rate rose to 1.07 per cent in April. This is approaching the Bank of Thailand’s inflation target of an average 1.1 per cent for this year.
“Corporates and entrepreneurs have to manage their financial cost before the country’s interest rate rises in the second half of this year,” TMB Analytics said.