Standard Chartered forecasts 3.3% growth for Thailand’s economy

Thim Leehaphan, economist at Standard Chartered Bank.
Thim Leehaphan, economist at Standard Chartered Bank.

BANGKOK, 29 July 2019 – Thailand’s economic growth is affected by various risk factors, including the effects of the trade war between the United States and China on exports and drought. Initial government stimulus measure are expected to stimulate tourism and provide assistance for farmers.

Thim Leehaphan, economist at Standard Chartered Bank, remarked that Thailand’s economic growth this year will be 3.3%, compared to 4% earlier forecast. That is largely due to various risks such as a sustained increase in household debt, drought, which is seriously affecting the agricultural sector, and trade wars depressing exports.

The tourism sector has risen 2% during this year’s first half due to a 10% reduction in Chinese tourists last month, while the number of European tourists has also dropped due to the critical weakening of the Euro currency and sustained strengthening of the baht.

The government policy to stimulate the short-term economy during the latter part of the year will largely come from fiscal 2019 budgets, amounting to some 80-100 billion baht. Most of the budget will finance tourism promotion and farmers assistance measures.

For the medium-term economy, the government has been advised to review its policies, pledged during electoral campaigns, the implementation of which would otherwise call for as much as 100 billion baht.

A minimum wage increase will increase the operating costs for the public and private sector and the planned 10% cut in personal income tax will reduce tax revenue by some 200 billion baht.

ational economic growth in the third quarter of this year is forecast to rise less than 3% and the last quarter 3.5%. Given the government’s economic stimulus measures, economic growth is expected to rise 3.3% throughout this year and to rise 4% throughout next year