Central bank: Thai economy weakens but far from recession


BANGKOK, Apr 1 – The Bank of Thailand (BoT) has given assurances that the Thai economy, despite deteriorating growth, has yet to suffer recession.

Mathee Supapongse, the central bank’s senior director of the Macroeconomic and Monetary Policy Department, said the country’s Q1 gross domestic product (GDP) will possibly shrink compared to last year’s Q4 which grew only 0.6 per cent.

A recession does not occur unless the country encounters two consecutive quarters of financial setbacks, he said, adding that the economy should pick up in the second quarter.

If the new government takes office in the second half of the year, public spending for the 2015 fiscal year will move on as planned, thus enhancing investors’ and tourists’ confidence, he said.

Now that the state of emergency has been cancelled, tourism should spring back in three months after the political situation returns to normal, he said.

Mr Mathee said the BoT will maintain projected GDP growth at 2.7 per cent and export growth at 4.5 per cent if relevant elements move as predicted.

Exports are the only positive factor contributing to economic growth and strengthened export will stimulate the industrial manufacturing sector, he said.

The business confidence index improved from 52 to 53.2 in February but investors’ concerns over the political impasse have slowed down their new investment, he said.

Economy in February declined from the preceeding month as people were more cautious in household spending and investment.

Indices in various sectors have fallen including private consumption by 2.5 per cent, private investment by 7.7 per cent, industrial manufacturing sector by 4.4 per cent and imports by 18.9 per cent.

Imports wee valued at US$14.254 billion while exports expanded by 2.2 per cent to US$18.15 billion.