THE economic growth forecast for this year could be revised down to 3.7-4.2 per cent from the earlier estimate of 4-4.5 per cent, the Centre for Economic and Business Forecasting under the University of Thai Chamber of Commerce said.
The downward revision follows the expected power vacuum after Thailand’s election this month, impacts from the US-China trade dispute and lack of clarity on Britain’s exit from the European Union.
Thanavath Phonvichai, director of the centre, said that though the economy would be stimulated by short-term spending for the election, Thailand might have to wait until the third quarter of the year before a new government takes shape. There could be a vacuum period for new fund infusion to stimulate the economy with the only acceleration coming from the remaining budget disbursement.
Though the US-China trade war has been easing, there will be impacts on the global economy from the US move to impose 10 per cent tariff on US$200 billion worth of Chinese goods, while Brexit remains unclear, he said.
“Our earlier growth projection was 4-4.5 per cent for the Thai economy. But it may be lowered to 3.7-4.2 per cent with 3.8 per cent being the average figure. The centre is revising down the economic figures for 2019,” he said.
Thanavath urged the new government to come up with policies to attract foreign investment, boost Thailand’s competitiveness and push up the Thai growth to 5 per cent, a figure he expects will encourage foreigners to invest in Thailand.
But to have 5 per cent economic growth, the new government might have to continue with the 20-year national strategic plan and mega-infrastructure projects extending from high-speed rail, airports, ports to the Eastern Economic Corridor. The country needs to restructure its product manufacturing to add more value with innovations and create human resources for technologies and the digital economy.
Based on the centre’s survey of 2,239 people nationwide in February this year about confidence in the Thai economy, the Consumer Confidence Index (CCI) increased for a second straight month to 82.0 from 80.7 in January. The current CCI inched up to 55.7 from 54.5 and the future index rose to 93.6 from 92.3.
Thanavath cited certainty about the election schedule and an active election environment nationwide for the rise in the indices. Political parties are expected to spend about Bt30 billion to Bt50 billion for their election campaigns and activities.
Chinese tourists have also returned to near-normal levels, as reflected in information from chambers of commerce nationwide about their high occupancy rates, while prices of agricultural products including field corn, tapioca, pork, chicken meat, duck meat and eggs have gone up. The US-China trade war has also eased after two earlier rounds of negotiations, he said.
“Consumer confidence has improved while Chinese tourists are back, the trade war has not worsened, and the Thai election is a certainty. Therefore, the Thai economy is expected to gain from these factors particularly from the spending in election campaigns,” he said.