Kasikorn Bank Thai GDP growth projection falls below 4%

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BANGKOK, Sept 16 – The Thai economy has experienced a downward plunge to its lowest rate, but the second half of the year should see a growth of almost 4 per cent, an economist said today.

Karnchana Chokepaisarnsilp, chief of Kasikorn Thai Research Centre’s Macro Economic Research Department, said the bank has adjusted Thailand’s gross domestic product (GDP) growth for this year to 3.7 per cent, or in the range of 3.5-4 per cent, a decrease from an earlier projection of 3.8-4.3 per cent.

The lower forecast was due to a slowdown in private sector spending while the export and industrial manufacturing sectors would take some time to spring back, she said.

Export growth projection was reduced to 1.5 per cent, within a range of 0.5-3 per cent, given optimism that the country’s exports would pick up later this year and expand more significantly next year – a vital factor in pushing Thailand’s GDP growth to 4.5 per cent next year.

She said an imminent decision by the US Federal Reserve on its economic stimulus through quantitative easing (QE), expected to be reduced from US$85 billion a month to US$75 billion a month must be closely monitored.

The Fed’s decision will prevent anxiety in the global money market and it is believed that the Fed will successively maintain the lower interest rate until late next year, she said.

The Thai money market and currency will be volatile in accord with the QE decision, she said.

Ms Karnchana said Thailand’s reserves at US$191 billion and excess assets liquidity in commercial banks at US$2.4 trillion would be adequate to cope with the worst case,  if any, from the Fed’s QE measures and capital outflows.

She said Thailand has yet to closely monitor the situation in Syria which remains volatile to impact the global oil market.