BANGKOK – CIMB Thailand is forecasting the Thai economy will expand 3.2 percent this year after seeing 3.3 percent growth in the first quarter.
CIMB Thailand’s Senior Director of Research, Amornthep Chawala pointed out that Thailand saw 3.3 percent growth in the first quarter of this year after seeing 3.1 percent in the same period last year. The stronger rise was due to an increased supply of farm produce, which brought higher incomes for growers, as well as recovery in the export sector and the strengthening of the oil price. He also mentioned greater demand on the world stage for electronics and state spending in the Kingdom as helping to drive up the economy.
Amornthep noted however that consumption has continued to sag due to high household debt and that private investment has been stagnant, contracting 1.1 percent in the first quarter and continuing a 4 year trend sustained by low activity internationally.
Exports are expected to slow somewhat in the latter half of the year due to restrictive measures in the US that could impact both China and Thailand. CIMB suggests the Bank of Thailand maintain its benchmark interest rate at 1.5 percent for the entire year to stabilize the economy.
On the Thai Baht, it is projected to drop to 35.5 to the US Dollar as the year continues, as policies in the US become clearer and the Federal Reserve raises its benchmark rate.
Regardless, the bank believes the Thai economy will continue to grow robustly, especially if state enterprises continue to be revamped with less restrictive regulations and are able to attract foreign investment. Full year economic growth is expected to come in at 3.2 percent.