Fiscal Policy Office slashes GDP growth estimate to 2.8% due to export slump

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BANGKOK – The Fiscal Policy Office (FPO) has adjusted down the annual economic growth target to 2.8 percent, based on expectation that the export slowdown will continue.

As announced by Ms Kulaya Tantitemit, Executive Director of the FPO’s Macroeconomic Policy Bureau, the growth projection for this year’s gross domestic production (GDP) has been reduced from 3 percent previously to 2.8 percent. The downward revision was due to remaining signs of slowdown in private consumption and investment in the third quarter, coupled with an export contraction of 5.3 percent.

Exports to China, Japan, the European Union and some ASEAN member countries were sluggish. However, healthy growth was seen in exports to the United States, Australia and the CLMV group, comprising Cambodia, Laos, Myanmar and Vietnam, leading to a projection of export growth for the whole year of no less than minus 5.4 percent.

As for 2016, the FPO predicted that economic growth would be around 3.8 percent, or within the range of 3.3-4.3 percent. Positive factors taken into account include the acceleration of state investment projects, improvements in the economies of trade partners and possible weakening of the Thai baht to 36.5 baht against the greenback, lending a boost to Thai exports.