Central bank lowers 2014 GDP to 3%

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The Bank of Thailand (BoT)’s Monetary Policy Committee last week announced the adjustment of the country’s gross domestic product (GDP) this year from the originally projected 4 percent to 3 percent due to the sluggish economy.

BoT spokesperson Roong Mallikamas said non-performing loans have been low – a positive sign thanks to caution among lenders and borrowers, and households’ disciplined spending.

Commercial banks have been more careful in extending loans to help small- and medium-sized customers in operating their businesses, she said.

The growth of household debts has been slow since early this year, mainly from loans on car purchases, tourism and education.

She said the inflation rate has not lowered, but slightly increased last month to 1.93 percent from 1.67 percent in December, partly resulting from energy costs.

Deflation is highly unlikely to materialize based on a 1.2 percent increase in the manufacturing price index last month due to a weakened exchange rate, the central bank spokesperson said.

Business operators predicted inflation in the next 12 months will be within the range of 3-4 percent, almost similar to cost increase – a factor that impedes them from setting product prices too high, but the BoT predicted this year’s inflation at 2-3 percent, said Roong.

She said the central bank spotted no unusual movement of capital and maneuvering of the currency since the general election.