BANGKOK, Oct 18 (TNA) – The Bank of Thailand (BoT) has decreased the country's economic growth estimate by 0.50-0.80 per cent for this year and next year, citing persistent domestic political turmoil and the economic crisis in the United States as key reasons for the decision.
Duangmanee Wongpratheep, the central bank's assistant governor overseeing the Financial Policy Group, revealed the central bank had revised its economic growth projection downward to 4.3-5 per cent this year and 3.8-5 per cent next year from the 4.8-5.8 per cent and 4.3-5.8 per cent targeted earlier.
She said the bank had lowered the growth estimate because Thailand's economy in the second and third quarters grew more slowly than expected.
Consumer, investor, and tourist confidence alike have been undermined by the ongoing political disturbances and the global economic slowdown.
Under the circumstances, the overall export and investment sectors have been affected.
At the same time, the state budget disbursements are lower than targeted because the business community felt worried about a possible change of the government, which could lead to an inconsistency in the investment policy.
BoT estimated that state investment will contract by 2.3 per cent and that public consumption will fall by 0.5-1 per cent this year, but would instead increase to 4.5-5 and 7-8 per cent respectively.
Private consumption will decline to 2.5-3.5 per cent this year but rise to 3.5-4.5 per cent next year, and private investment will expand 4-5 per cent this year and 5-6 per cent next year.
In addition, the Thai economy is still experiencing risk factors from the world economic crisis and the worse-than-expected economic slowdown of the country's trading partners.
The bank forecast that exports will grow at only 3.5-6.5 per cent next year against 6-9 per cent this year while imports would drop to 5.5-8.5 per cent this year and 4.5-7.5 per cent next year.
The balance of trade is expected to be in surplus of US$1-3 billion for this year and in deficit of $1-4 billion in the coming year.
Thailand's current account balance is expected be in surplus of only $1-4 billion because the tourism sector had expanded at a slower pace that expected. (TNA)