BANGKOK, 25 March 2012 – The Fiscal Policy Office (FPO) has expressed concern that China’s economic slowdown will impact the world economy, including Thailand’s export sector, preventing it from achieving its targeted growth.
FPO Director-General Somchai Sajjapongse stated that the fact that foreign investors are pulling out of the Chinese stock market has hinted that an economic bubble burst in China’s real estate sector is looming. It is highly believed that China will soon suffer a severe economic setback, which will see its growth decline to only 6% from the previous estimation of 8-9%.
The FPO Director-General stated that his office is bracing for volatility which may be brought on by China. In addition, it is looking for measures to deal with the current crude oil situation in the global market, which has pushed the initial cost of transportation up by 0.3-0.4% along with an increase in goods prices and cost of living.
The FPO has predicted Thailand’s GDP growth for 2012 at 5.5-5.7%, which is lower than the figure of 5.5-6.5% predicted by Office of the National Economic and Social Development Board (NESDB).
Meanwhile, the Deputy Managing Director of the International Monetary Fund (IMF), Mr. Min Zhu, believed that the Chinese economic slowdown will happen in a gradual rather than an abrupt manner despite the Chinese government’s data pointing to a weak growth in the country’s economy.