THE UNIVERSITY of Thai Chamber of Commerce (UTCC) has raised its forecast of Thailand’s economic growth this year to 4.6 per cent from an earlier estimate of 4.5 per cent after improved export, tourism and crop prices. It also expects the Bt40-billion spending in the 2019 general elections to spur the economy.
Thanavath Phonvichai, director of UTCC’s Centre for Business and Economic Forecasting, said export and tourism sectors have continued to expand from early this year thanks to a boost in global economy and increase in the prices of several crops, particularly paddy rice, sugar cane and corn.
Private investment is also showing signs of recovery and public spending has increased, he said.
UTCC reckons Thai exports will grow by 8.7 per cent and imports will rise by 12.6 per cent. The country’s current account is expected to have a surplus of US$34.6 billion (Bt1.1 trillion). Headline inflation is predicted at 1.2 per cent, while the currency is expected to hover at 31.50 to 33.50 per US dollar.
However, the US-China trade war is expected to present some risks, along with rising interest rates, emerging markets’ currency crises and local disasters.
The centre has urged the central bank to maintain the policy rate at 1.5 per cent this year as it is sufficient to stimulate the economy, though it can increase the rate twice next year – 25 basis points in the second quarter and 25 basis points in the last quarter.
The economy is projected to grow by 4.5 per cent next year and 4 per cent in 2022.
“Though the elections are looking certain, it still depends on how much money the ruling junta will unlock. About Bt30 billion to Bt40 billion is expected to be spent on the election, which has boosted the confidence of Thais and foreigners,” Thanavath said.
Earlier, Kasikorn Research Centre revised up its projection for 2018 to 4.5 per cent from a previous prediction of 4 per cent due mainly to expansion in export, tourism, domestic spending. Several government projects will be up for bidding soon, which could support the Thai economy in the latter half of this year.
Siam Commercial Bank’s Economic Intelligence Centre has also increased its prediction of national growth this year to 4.5 per cent from 4.3 per cent. It expects the latter half of the year to see a 4.2 per cent growth due to continued increase in domestic demand.
TMB Analytics has also revised up its forecast to 4.5 per cent from 4.2 per cent, and expects exports to climb by 8.6 per cent this year.
The International Monetary Fund, meanwhile, has forecast global economic expansion at 3.9 per cent, which could support Thai exports. Average Brent crude price is expected to rise to $71 per barrel this year from last year’s average at $55 per barrel, which will likely boost the price of oil-related agricultural products and commodities which account for about 25 per cent of Thai export.
The National Economic and Social Development Board estimates the Thai economy to expand 4.5 per cent with an estimated growth range of 4.2-4.7 per cent, while the Fiscal Policy Office anticipates growth at over 4.8 per cent in light of higher crop prices.