Finance Ministry slashes economic growth forecast but predicts brighter 2020

[webfact]

Finance Ministry slashes economic growth forecast but predicts brighter 2020

By The Nation

 

 

Lavaron Sangsnit, director of the Fiscal Policy Office, announced on Monday (October 28) that the Finance Ministry has cut its growth forecast to 2.8 per cent from 3 per cent previously estimated.

 

The major impact on growth is the contraction of exports, which is estimated to be 2.5 per cent this year, compared to the 0.9 per cent contraction predicted earlier. The impacts of the US-China trade war and the global slowdown have been blamed for the contraction.

 

 

The ministry is however optimistic that exports next year will bounce back and expand 2.6 per cent year on year.

IMF calls for further easing of monetary policy, more govt spending amid slow growth.

 

The recent government stimulus package is expected to expand the economy by 3.1 per cent in the final quarter of this year and by 3.3 per cent in 2020, compared to 4.1 per cent growth last year, he said.

 

However, the impacts of the trade war and the slowing down of the global economy remain major risks for Thailand.

 

Household consumption is expected to grow by 3.8 per cent this year and 3.5 per cent next year while private investment is expected to expand by 2.7 per cent this year and 4.6 per cent next year. Public investment is projected to grow by 1.4 per cent this year and 6.6 per cent next year. Headline inflation remains very low at 0.8 per cent this year due to falling crude oil prices and sluggish economy.

 

Lavaron said that projected growth rate of 3.1 per cent in the second half this year was higher than in the first, which saw a growth rate of 2.6 per cent, and was due largely to the government stimulus package, which has injected about Bt60 billion into the economy. Of this amount, some Bt51 million is being used as an income guarantee for farmers and as cash handouts for the poor. The Eat, Shop and Spend scheme to promote domestic tourism is expected to inject about Bt10 billion into the economy, he added.

 

Pisit Puapan, director of macro-economic analysis division, said that the new forecast is based on the assumption that the economic growth of major trading partners would expand at 3.3 per cent, decelerating from 3.5 per cent previously estimated due to impact of slower growth in China and the US.

The value of the baht this year is Bt31.1 per dollar on average, up 3.8 per cent from last year. The baht is expected to strengthen to Bt30.75 next year, 1.1 per cent up from this year. The baht has appreciated 5.6 per cent since early this year, which is expected to rise to 6.2 per cent by the end of this year.

 

Average Dubai oil price is expected to be US$62.7 per barrel, down from previous forecast of $65.5. The oil price next year is expected to drop to $61.2 per barrel.

 

The number of tourist arrivals, meanwhile is forecast at 39.8 million, down from 40 million predicted earlier, largely due to slowdown of Chinese tourists in the first half of 2019. The Number of foreign tourists next year is expected to grow by 4.1 per cent to 41.5 million.

 

Public spending remains an economic driver as disbursement of current spending and capital spending is projected to be 98 per cent and 70.3 per cent respectively, he added.

 

Source: https://www.nationthailand.com/business/30377826

 

-- © Copyright The Nation Thailand 2019-10-29

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[timendres]

12 minutes ago, webfact said:

 

A little blue arrow! Well, that settles it. A rosy future awaits Thailand.

[Cadbury]

1 hour ago, webfact said:

The baht is expected to strengthen to Bt30.75 next year, 1.1 per cent up from this year. The baht has appreciated 5.6 per cent since early this year, which is expected to rise to 6.2 per cent by the end of this year.

And as a consequence of this increase and the continually growing value of the baht then export value will rise from -2.5% in 2019 to + 2.6% in 2020. That assumption defies gravity.

That convoluted hypothesis totally destroys the validity of all the ambitious and optimistic projections of the Fiscal Policy Office, Q.E.D.

Edited October 28, 2019 by Cadbury

[30la]

When will the fairy tales on the Thai economy end?
Day after day lies!

[saengd]

2 hours ago, Cadbury said:

And as a consequence of this increase and the continually growing value of the baht then export value will rise from -2.5% in 2019 to + 2.6% in 2020. That assumption defies gravity.

That convoluted hypothesis totally destroys the validity of all the ambitious and optimistic projections of the Fiscal Policy Office, Q.E.D.

The link between currency strengthening and reduced exports is not as clear cut as it once was, the rules have changed so what we thought was obvious some years ago, is not necessarily valid today.

 

https://www.wsj.com/articles/when-currencies-fall-export-growth-is-supposed-to-followuntil-now-1497207236

 

[PatOngo]

3 hours ago, webfact said:

Finance Ministry slashes economic growth forecast but predicts brighter 2020

Well cut off my legs and call me Shorty, I'm growing taller!

[RotBenz8888]

3 hours ago, timendres said:

 

A little blue arrow! Well, that settles it. A rosy future awaits Thailand.

The only Viagra that'll prevent that arrow from a serious slack is a Baht devaluation, meanwhile they're enjoying the TAT porn....

[Assurancetourix]

3 hours ago, webfact said:

The ministry is however optimistic that exports next year will bounce back and expand 2.6 per cent year on year.

Methode Coue as we say in France 

 or auto-suggestion in english 

 

It can not hurt even if it serves only to not lose face. 

I think he is in his bubble and does not read the pessimistic news and even sometimes alarming coming from China or recession watching;

The growth in industrial production fell to its lowest level in 17 years, settling last month at 4.4% year-on-year.

and he who depends almost entirely on the Chinese economy thinks that a 3.3% increase in Thailand's industrial output is realistic?

The next year will be even darker than this year; if Thailand does not go into recession, it will not be far off.

[Jimbo2014]

Yup.  Thai domestic and foreign global debt is at record levels.  Real wages have gone nowhere but cost of living is much higher.  Thai baht is at record high levels.  Regional competition is increasing.  Demographics are aging.  Pollution and environmental degradation is increasing.  Trade war is intensifying.  What other conclusion could anyone draw but a "bright economic future"!  ????????????

[mikebell]

Then there's the housing bubble ready to pop; empty condos; unsold houses; downturn in rents.  The future looks bright except for those trying to sell up and leave this sinking ship.

[Caldera]

At that rate and with a rapidly ageing population, Thailand will never be a developed country.

[tlandtday]

4 hours ago, saengd said:

The link between currency strengthening and reduced exports is not as clear cut as it once was, the rules have changed so what we thought was obvious some years ago, is not necessarily valid today.

 

https://www.wsj.com/articles/when-currencies-fall-export-growth-is-supposed-to-followuntil-now-1497207236

 

Don't believe everything you read....

[saengd]

10 minutes ago, tlandtday said:

Don't believe everything you read....

Did you even bother to read the link, do you not believe the BOE!

[Redline]

More blame games with childlike infograghs ????