KResearch lowers 2019 growth projections for Thai economy, exports amid challenging global slowdown

Economy April 02, 2019 18:22

By The Nation

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KResearch on Tuesday held a panel discussion on “Measuring the Thai Economic Temperature after the Election”, at which it said it was lowering its forecast for this year’s economic growth to 3.7 per cent, as well as cutting its projection for export growth.

According to a KResearch poll conducted among members of the general public and the business sector before and after the general election, it was found that the March 24 election had given a boost to confidence, the forum was told.

Nevertheless, close attention should be paid to the formation of the new government, which may influence confidence.

Nattaporn Triratanasirikul, KResearch assistant managing director, said: “No matter how the government is formed, Thailand will be challenged by the global economic slowdown, which will, in turn, affect its exports. 

“The new government has to expedite the implementation of economic-stimulus policies under the fiscal year 2019 budget, including the passing of the FY2020 budget bill.

“If the new government can be formed within June, and the economic stimuli can be implemented as expected, household consumption will be boosted by 0.2-0.4 per cent of gross domestic product, and the Thai economy in the second half of 2019 will be brighter than in the first half.”

However, KResearch has revised downward its growth forecast for the Thai economy to 3.7 per cent, or within a band of 3.2-3.9 per cent, from the 4-per-cent pace predicted before, the forum heard.

The lower economic-growth projection reflects an expected slowdown in Thai exports resulting from the economic downturn in the Kingdom’s key trading partners, despite better-than-expected improvements seen in the US-China trade dispute, she said.

KResearch has also cut its export-growth projection for 2019 to 3.2 per cent from the previous 4.5 per cent, and its import-growth forecast to 4.3 per cent from 5.3 per cent.

For the outlook on domestic interest rates, Nattaporn expects the policy rate to be kept at 1.75 per cent throughout this year. 

High liquidity at local commercial banks, and the banks’ gradual approach to approving loans, currently should not intensify competition in the banks’ interest rates, she explained. 

As for the movement of the baht, KResearch forecasts that the unit will weaken and move within the range of 31.20-32.50 per US dollar. 

Meanwhile, factors deserving close attention are domestic issues, especially the political and economic situations, she said.