Central bank forecasts sluggish consumption, economy

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BANGKOK, Nov 30 – The political conflicts have wreaked havoc on Thailand’s economy which saw declining domestic consumption, business confidence, private investment and exports, according to a central bank economist.

Dr Roong Mallikamas, the Bank of Thailand (BOT)’s director of the Macroeconomic Policy Office, said business confidence index declined from 47.5 in September to 47.4, and it will be lowered from 52.3 to 51.7 for the index over the next three months.

Domestic purchases of durable appliances and energy have decreased due to the political uncertainty, she said.

She said the private sector was waiting for the political conflicts to unfold and for the economy to strengthen domestically and internationally after October exports shrank 0.5 per cent to a value of US$19 billion.

Private investment has reduced by 4.9 per cent after delays in new investment projects, particularly industrial manufacturing for exports, she said.

Investments for exports should expand again if the export situation improves next year, Mrs Roong said, adding that declining production has automatically lowered imports by 4.6 per cent, to a value of US$18.7 billion.

She said the recent reduction of policy interest rate by 0.25 per cent would lower risk and maintain monetary security at a certain level in light of high volatility.