Kirida Bhaopichitr, a former senior economist at the World Bank, told a seminar yesterday that the global economy would be very volatile next year with many uncertainties including the policies of the new US administration.
“For sure, the TPP won’t happen, but other things are unpredictable,” she said, referring to the Trans-Pacific Partnership.
If the United States erects trade barriers against Chinese products, Thailand could be affected as well, since the Kingdom ships a lot of goods to China, where they undergo final assembly and find their final destinations in the US market.
“But on the other hand, Chinese firms may relocate more of their bases to Asean,” Kirida said.
Moreover, the new Donald Trump administration may become less concerned about overseas issues such as human rights on which the previous US administrations have exercised measures against Thailand and other nations through the “Trafficking in Persons” report, she said.
Predicting that Thai gross domestic product will grow by 3.2 per cent in 2017, up slightly from 3 per cent this year, Kirida said the biggest concern would be the export sector. The Kingdom could not rely on a few markets such as the US, Australia and Japan where it has enjoyed positive export growth this year, whereas other markets including those in Asean booked declines in exports.
Sudhir Shetty, chief economist for East Asia and the Pacific at the World Bank, presented the bank’s October report, which predicted that Thailand would continue to have lower economic growth than most other developing East Asian economies during the next two to three years.
He suggested that the government should select public investment projects carefully. He also recommended that Thailand focus on liberalising its service sector as a way to reverse a decline in foreign direct investment.
Shetty said uncertainties had arisen since the “unexpected US election” results last month, and countries should make sure they have fiscal buffers against “bad shocks”.
“This is not a warning against imminent risk, but there are some risks,” he said.
Among the major risks to the global economy in 2017 are weaker trade growth, which seems to persist as a “new normal” after a spike in trade barriers against many products around the world, and financial-market turbulence.
Published : December 09, 2016
By : PICHAYA CHANGSORN THE NATION