The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is sticking to its GDP growth forecast of 4.4 to 4.8 per cent despite a difficult third quarter, insisting the setbacks are only temporary.
“Despite economic setbacks in the third quarter of this year, we expect the annual GDP and exports for 2018 to grow at a satisfying rate,” chairman of the Thai Chamber of Commerce and Board of Trade of Thailand, Kalin Sarasin, said yesterday at a JSCCIB press conference.
The JSCCIB has forecast GDP growth at 4.4 to 4.8 per cent this year, compared to 3.9 per cent in 2017. Export growth is predicted at 8 to 10 per cent, compared to 9.9 per cent last year. Inflation is set to increase from 0.9 to 1.5 per cent compared to a 0.7 per cent in 2017.
“Economic growth in the third quarter has slowed compared to the first half of this year. Exports, tourism, agriculture and manufacturing sectors have also seen a slump in growth rates in the third quarter,” says Kalin.
He pointed to an alarming decrease in the number of Chinese tourists visiting the Kingdom since the middle of this year.
In August, 867,000 visited the Kingdom, down 11.77 per cent month on month. In September, only 648,000 Chinese tourists visited, another 14.89 per cent fall month on month, according to the JSCCIB.
“One of the key contributors to this slump in Thailand’s third quarter economic growth is the ongoing US-China trade war,” he says.
“The trade war has led to the depreciation of the Chinese yuan in the past few months,” he said. “This has led to a reduction in the purchasing power of Chinese tourists and businesses, a key reason contributing to the declining rate of Chinese tourists visiting Thailand.”
“The Thai government aims to stimulate tourism by exempting visa application fees for tourists from 21 countries. Furthermore, the JSCCIB has urged the government to prioritise its regulatory guillotine project to target unnecessary legislation which hinders the convenience of tourists coming to Thailand,” Kalin said.
“Furthermore, we expect the Thai government to increase spending to stimulate the economy through its various projects such as investing in the infrastructure of the Eastern Economic Corridor [EEC],” he said.
Kalin dismissed concerns over the US decision to remove 11 Thai items from its Generalised System of Preferences (GSP), a US tariff-exemption programme.
“The 11 GSP items make up a very small portion of Thai exports to the US and a fraction of total Thai exports,” he says.
In 2017, the 11 GSP items had a total value of US$46 million or 1.11 per cent of total GSP exports with a total value of $4.2 billion. Furthermore, the GSP products only make up 16 per cent of total Thai-US exports.
“Despite these setbacks, we expect the GDP and exports for 2018 to grow at a satisfying rate,” he said.
Thailand’s exports in September were valued at $ 20.7 billion, down 5.2 per cent year on year. When converted to Thai baht, it was valued at Bt676.410 billion, down 6.2 per cent year on year, Ghanyapad Tantipipatpong, chairman of the Thai National Shippers’ Council (TNSC), said yesterday at a separate event.
Despite the decline in exports, the TNSC still predicts export growth of 8 per cent for 2018. However, export growth for 2019 has been cut to 5 per cent due to the impacts of the US-China trade war, according to Ghanyapad.