The Bank of Thailand (BoT) lowered its projection for the country’s economic performance this year to 5.7 percent from its previously forecast 6 percent, Asst Gov Paiboon Kittisrikangwan said Friday.
The adjustment dropped because the economy in the second quarter expanded only 3.5 percent compared to the same period last year, and only 3.3 percent compared to this year’s first quarter.
However, Paiboon said the third quarter will grow 3.2 percent, but expand to 16.4 percent in the fourth quarter. Such high growth of more than 10 percent 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 percent, from earlier forecast at 5.8 percent.
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 percent, while the stagnant growth of the Thai export sector has affected 0.4 percent of the lowered GDP.
According to Paitoon, trade with Thailand’s partners will decline from 4.8 percent to 4.5 percent, while the country’s overall exports will grow only 7 percent from an earlier prediction at 8 percent.
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, Paiboon noted.