Thailand’s 2012 economic growth projection drops to 5.7% from previously forecast 6%: BoT

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BANGKOK, Aug 3 – The Bank of Thailand (BoT) lowered its projection for the country’s economic performance this year to 5.7 per cent from its previously forecast 6 per cent, Ass’t Gov Paiboon Kittisrikangwan said Friday. 

The adjustment dropped because the economy in the second quarter expanded only 3.5 per cent compared to the same period last year, and only 3.3 per cent compared to this year’s first quarter.

However, Mr Paiboon said the third quarter will grow 3.2 per cent, but expand to 16.4 per cent in the fourth quarter. Such high growth of more than 10 per cent would compare to the same period last year when the country was facing difficult flood situations.

Meanwhile, the bank sees the country’s Gross Domestic Product (GDP) next year growing by only 5 per cent, from earlier forecast at 5.8 per cent.

The downgrade was based on the government’s slow management of finances such as budget spending and flood prevention measures, resulting in a lowered GDP of 0.3 per cent, while the stagnant growth of the Thai export sector has affected 0.4 per cent of the lowered GDP.

According to Mr Paitoon, trade with Thailand’s partners will decline from 4.8 per cent to 4.5 per cent, while the country’s overall exports will grow only 7 per cent from an earlier prediction at 8 per cent.

He said the BoT must monitor the higher risks of the weakening world economy in the second half of 2012, which will affect the country’s export sector and lessen consumption, while domestic stimulants to the economy are also slowing down.

However, the slowed economy tended to lower inflation rates, both headline inflation and core inflation, Mr Paiboon noted.