JSCCIB maintains year’s growth forecast, highest rise expected for Q1 

Economy June 06, 2018 01:00

By   THE NATION

THE JOINT Standing Committee on Commerce, Industry and Banking (JSCCIB) will review its economic forecast in the next meeting on July 3, while expecting this year's economic expansion to be within its estimated range of 4.0-4.5 per cent. 



Predee Daochai, chairman of Thai Bankers' Association, said the country could see the highest quarterly economic growth at 4.8 per cent in the first quarter of this year. However, economic expansion might then slow down, but no less than 4.0 per cent, for the following quarters of the year.

This year's economic growth, therefore, is expected to be within JSCCIB's estimated range of 4.0-4.5 per cent with export growth forecasted at 5-8 per cent, said Predee who is also president of Kasikornbank. Headline inflation is projected at 0.7-1.2 per cent.

“This year's economic growth will be reviewed to touch the upper estimated range of 4.5 per cent. Information and figures for June will be gathered for the review in the next meeting on July 3," he said.

In May, the Bank of Ayudhya (BAY) revised up its forecast of this year’s economic growth to 4.7 per cent from the earlier estimate of 4 per cent after higher-than-expected rises in export, consumption and private investment in the first quarter, reflecting higher growth distribution in other economic figures in addition to export and tourism.

Thai growth is projected at 4 per cent or higher for the other three quarters of the year, the bank said. It projects headline inflation and core inflation at 1 and 0.7 per cent, respectively.

Meanwhile, risks spanning from low agricultural product prices to high crude prices to purchasing power of consumers will still be followed up, while a close watch will be kept on Italy's political developments and the US trade policy which could spark trade retaliation from its major partners, thus affecting world commerce. Other factors are fluctuations in the money and capital markets, Predee said.

Visit Limlurcha, vice chairman of Thai National Shippers' Council (TNSC), said that crude price which has risen to US$70-$80 per barrel could be good for Thai exports as our trading countries will have higher purchasing power as a result.

However, if crude price surged to $100 per barrel, the cost of Thai export will rise, he said. A present, Thai exporters can afford higher transport costs.

Ghanyapad Tantipipatpong, TNSC chairman, says the council still expects Thai export to rise by 8 per cent this year, given the growing economies of Thailand's trading partners in the main, secondary and potential markets; the likely rises in crude price which could lead to higher purchasing power of oil-producing countries and the likely price increases of oil-related and agricultural products. 

In the first four months of this year, Thai export increased 11.53 per cent in term of US dollar, while inched up 0.58 per cent in term of the baht, reflecting wider differential as a result of the Thai currency’s appreciation, Visit said, adding the baht at 33 per US dollar is good for Thai export.

Tak Bunnag, head of global markets group at BAY, said that the baht is expected to appreciate to 31.25 per US dollar by the end of the year and may continue its appreciation next year. In the first half of next year, the baht is expected to hit 30 per US dollar due to Thailand's sound economic fundamentals and the general election.

The money market is expected to move with volatility in the latter half of this year as the global economy will likely grow at decreasing rates, he said. 

While higher Thai import could lessen pressure on the baht, higher US bond yield, if above 3 per cent, could affect investment in emerging-market countries, including Thailand, with quick capital movement.