Central bank predicts slower Thai economic growth next year

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BANGKOK, Dec 13 – Political turmoil and a leadership vacuum will pose a long-term and severe impact on the Thai economy, the Bank of Thailand (BoT) warned.

BoT Governor Prasarn Trairatvorakul said the government’s economic administration is the driving force for Thailand’s economic system which involves public spending, investment, trade negotiations, exports, tourism and many others.

Without an administrative body to take charge of the economy and economic policy, the entire system will be in trouble, resulting in a slowdown, he said.

He said monetary policy will help stimulate the economy but at a smaller scale and it would not be as effective as the government’s economic policy.

If necessary, monetary policy is capable of cushioning the economy only on a temporary basis, he explained.

BoT spokeswoman Rung Mallikamas said Thailand’s economic growth next year should not be less than 0.5 per cent thanks to strengthened global economy which will contribute to the country’s export expansion.

She said the Money Policy Committee (MPC), in its meeting on November 27, projected a gross domestic product growth at 4 per cent without an anticipation of a House dissolution.

The economic situation has become more volatile, compelling the MPC to review Thailand’s 2014 economic forecast in its meeting late next month, she said.

She said a delay in the state’s investment projects, pending a new government, will not have an impact on the MPC’s economic projection since it has already scaled down investment funding for various major projects.