Trade war dampens mood as GDP growth view scaled back to 3.7%

[webfact]

Trade war dampens mood as GDP growth view scaled back to 3.7%

By PHUWIT LIMVIPHUWAT 
THE NATION

 

 

CONCERNS over political uncertainty and the impact of the US-China trade war have prompted the nation’s peak private sector advisory grouping to cut its forecast for economic growth this year to as low as 3.7 per cent.

 

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) cited the clouded political outlook and the superpower trade dispute as the two biggest risks facing the economy.

 

 “The private sector is worried about the political uncertainty in the upcoming months, which may lead to political unrest and damage the local economy,” Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said at a press conference yesterday.

 

Kalin Sarasin, chairman of the Board of Trade of Thailand, said: “Stability is what we value the most. It is the reason why foreign investment and tourism has been a key driver of economic growth. Hence, political uncertainty can be a key risk to the Thai economy.”

 

As a means of reducing the political uncertainty, Supant said that he wanted the new government to be formed next month, as soon as possible after the royal coronation ceremony set for May 4.

 

Once the new government is formed, the FTI chairman urged that progressive policies be pushed out, instead of populist ones that may damage the financial foundations of the country in the long run.

 

As for investment, the political uncertainty will not halt ongoing projects, Supant said. However, prospective investors may delay their spending plans in the Kingdom until its politics becomes more stable. 

 

This month, the JSCCIB reduced its GDP growth forecast for 2019 from a range of 4 to 4.3 per cent predicted in December to between 3.7 and 4 per cent.

 

 However, Supant said that this downward adjustment did not account for the risks arising from political uncertainty. 

 

The lowered estimate is largely a result of the global economic slowdown and the US-China trade war. 

 

 “There are external factors that present a threat to the economic growth of Thailand, as well as the global economic growth,” Supant said. “The largest threat of all is the ongoing US-China trade war, which has continued to dampen Thai exports in 2019.”

 

Exports for January and February contracted by 0.16 per cent, year on year, with a value of Bt1.294 trillion, according to the Commerce Ministry. 

 

Reflecting this decline, the JSCCIB scaled back its forecast for export growth in 2019, from a range of 5 to 7 per cent stated in December to 3 to 5 per cent. 

 

The United Kingdom’s departure from the European Union may also lead to impacts on the Thai economy, the committee said. 

 

 “Although Brexit may not significantly impact Thai exports and investments, it may weaken the level of investors’ sentiment globally,” said Predee Daochai, chairman of the Thai Bankers’ Association. 

 

 “This will have global ramifications and may negatively impact the Thai capital market,” he said. 

 

 

Full story: http://www.nationmultimedia.com/detail/Economy/30367088

 

 

[Srikcir]

5 hours ago, webfact said:

“Although Brexit may not significantly impact Thai exports and investments

Au Contraire
Britain has failed to finalise most trade deals needed to replace the EU’s 40 existing agreements with leading global economies and will not be close to doing so when Brexit occurs on March 29. 

“Almost none of them are ready to go now and none will be ready to go by March,” said one government official who has seen the internal analysis of the Department for International Trade’s progress. https://www.ft.com/content/c44581c2-1a75-11e9-9e64-d150b3105d21

That's the status with "leading" economies of which Thailand is not.

I expect for the next year UK-Thailand trade will default to WTO rules which are less advantageous than the EU-Thailand trade agreement. Also remember that after Brexit the UK will be a trade competitor with the EU that might further complicate time-wise a final UK-Thailand trade deal.

[sanemax]

4 minutes ago, Srikcir said:

Au Contraire
Britain has failed to finalise most trade deals needed to replace the EU’s 40 existing agreements with leading global economies and will not be close to doing so when Brexit occurs on March 29. 

“Almost none of them are ready to go now and none will be ready to go by March,” said one government official who has seen the internal analysis of the Department for International Trade’s progress. https://www.ft.com/content/c44581c2-1a75-11e9-9e64-d150b3105d21

That's the status with "leading" economies of which Thailand is not.

I expect for the next year UK-Thailand trade will default to WTO rules which are less advantageous than the EU-Thailand trade agreement. Also remember that after Brexit the UK will be a trade competitor with the EU that might further complicate time-wise a final UK-Thailand trade deal.

Looks like the U.K is going to remain in the E.U's customs union , and so will be unable to sign any trade deals 

[Cadbury]

5 hours ago, webfact said:

Trade war dampens mood as GDP growth view scaled back to 3.7%

In the meantime Vietnam GDP growth has hit 7.08% for 2018, now exceeding China for the first time at 6.9%.

5 hours ago, webfact said:

.....scaled back its forecast for export growth in 2019, from a range of 5 to 7 per cent stated in December to 3 to 5 per cent. 

 

Political insecurity and high baht will send exports even lower. Higher minimum wages will be nice for the people but will make Thailand less competitive with other nations like Malaysia and Vietnam.

Thailand is screwed under military rule. It is embedded corruption that keeps the wheels of the economy turning and keeps the filthy rich 1% in the opulent lifestyle a succession of generals have created for them.

[lipflipper]

And the beat goes on. Yep, the Thai economy is heading for a serious contraction and I for one could not be more pleased. Maybe the manipulation of the Baht, the false predictions for economic growth and the false claims that everything is coming up roses will halt. Oh silly me, there I go again forgetting T.I.T. At least I should be able to see the Baht weakening against the major world currencies in the very near future.

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