Central bank governor foresees growth rate higher in 2020

[webfact]

Central bank governor foresees growth rate higher in 2020

By The Nation

 

Veerathai Santiprabhob, central bank governor, left, says GDP will expand 2.8 per cent next year.

 

The Thai economy will grow next year but its rate of growth is likely to be well below its potential, says Veerathai Santiprabhob, central bank governor.

 

Speaking at the Thailand Economic Outlook hosted by Krungthep Turakij newspaper, Veerathai said GDP will expand 2.8 per cent next year. “The growth would be higher next year than this year, but it remains below potential of 3.5-4 per cent,” he told the seminar’s participants.

 

Exports would return to growth next year and drive the economy forward, he said.

 

The central bank recently cut its growth forecast to 2.5 per cent this year and predicted exports of goods and services to contract by 4.8 per cent in 2019 before returning to growth of 1.4 per cent next year.

 

As for the appreciation of the baht, Veerathai blamed the structure of the Thai economy.

 

Structural issues have emerged during economic slowdown; labour and baht appreciation are by-products of the underlying forces, he said.

 

“When we get a cough, it may be caused by inflammation inside our body and while medicine will relieve the symptoms, it cannot cure the real illness,” he said alluding to how cuts in the policy rate would not restrain baht appreciation.

 

Exporters and businesses have long complained about the rising baht against the US dollar and other key currencies, while academics say the large current account surplus combined with weak investment have been the real cause of baht appreciation. The baht has risen about 7 per cent against US dollar since early this year.

 

The central bank cut the policy rate twice this year, bringing it to the low level of 1.25 per cent.

 

The cut partly aimed to deter investors from parking their money in Thailand hoping to gain from the strengthening baht but has done nothing to make the baht weaker.

 

Source: https://www.nationthailand.com/business/30379748

 

-- © Copyright The Nation Thailand 2019-12-23

Follow Thaivisa on LINE for breaking Thailand news and visa info

[keith101]

24 minutes ago, webfact said:

he central bank cut the policy rate twice this year, bringing it to the low level of 1.25 per cent.

 

The cut partly aimed to deter investors from parking their money in Thailand hoping to gain from the strengthening baht but has done nothing to make the baht weaker.

That's because they didn't cut it far enough . To little to late to have a real affect .

[webfact]

Thai central bank has not closed door to further easing - governor

By Satawasin Staporncharnchai

 

FILE PHOTO: Thailand's Central Bank Governor Veerathai Santiprabhob speaks during an interview with Reuters at the Bank of Thailand in Bangkok, Thailand, October 4, 2019. REUTERS/Matthew Tostevin

 

BANGKOK (Reuters) - Thailand's central bank has not shut the door to further monetary policy easing should the economy worsen, the governor said on Monday, after two rate cuts this year to support flagging growth.

 

The Bank of Thailand (BOT) last week left its policy rate <THCBIR=ECI> at 1.25%, a record low last seen during the global financial crisis. It will next review policy on Feb. 5.

 

"We did not say we had closed the door," Veerathai Santiprabhob told a business seminar. "If the economic situation is worse than expected, the monetary policy committee is ready to use tools to help lift growth".

 

Last week, the BOT lowered its 2019 economic growth forecast to 2.5% from 2.8%, and next year's outlook to 2.8% from 3.3%. Last year's expansion was 4.1%.

 

Although Southeast Asia's second-largest economy is expected to perform better next year, the pace of growth is still unsatisfactory, Veerathai said.

 

"Growth of 2.8% is still below potential and we are not satisfied with that," he said.

 

"Our potential (growth) is 3.5%-4.0%, and it will be higher if there are structural reforms," he said, adding the country needed to promote investment, increase competitiveness and develop technology.

 

Veerathai also said the strength of the baht currency <THB=TH> has been driven by external factors and Thailand's large current account surplus, which is expected to be $35 billion this year and $30 billion next year.

 

The BOT has steadily taken action on any excessive moves in the baht and will continue to do so, he said, noting the currency is likely to remain volatile.

 

The baht has been Asia's best performing currency this year, up 7.7% against the U.S. dollar, putting more pressure on the trade-reliant economy amid global trade tensions.

 

(Reporting by Satawasin Staporncharnchai; Writing by Orathai Sriring; Editing by Jacqueline Wong)

 

-- © Copyright Reuters 2019-12-23

Follow Thaivisa on LINE for breaking Thailand news and visa info

[Grumpy John]

There will be some hurt for the little guys, already many unemployed and under-employed.  As well there are plenty of kids graduating that don't have jobs to go to.....well that's not entirety accurate as there are plenty of day labour jobs available if they GET of there butts and look. 

[NCC1701A]

I am sorry to say this but I feel the Baht could go to 27 to the US dollar like in 2012. This is were the Baht will turn round and begin to weaken back 36 to the dollar, but that will be over a five to seven year period.

 

as a fellow Expat here in Thailand I can sure feel everyone pain with the strong Baht.

 

That is why if I am elected POTY I will do everything in my power to weaken the baht. 

 

Please vote right now for NCC1701A for POTY.

 

[bluesofa]

1 hour ago, webfact said:

Central bank governor foresees growth rate higher in 2020

Are they using the same fortune teller as TAT?

[Topdoc]

 

Interesting growth profile in the top right corner of the chart. 

 

1986 - 90: 10.3%

1991 - 95:   8.2%

1996 - 00:  Ignore this reading because of Asian Financial Crisis

2001 - 05:  5.5%

2006 - 10:  3.8%

2011  - 15:  2.9%

 

It's not difficult to spot the long term trend in GDP growth. Interesting too that in 2005 the interest rate was 5%, in 2007, 3% and in 2015 1.75% which proves that lower & lower interest rates do not boost GDP except perhaps briefly!

 

[Topdoc]

Thailand's customs-cleared exports in November fell 7.39% from a year earlier, after falling 4.54% the previous month, the commerce ministry said on Monday.

https://www.bangkokpost.com/business/1822464/november-exports-drop-7-4-worse-than-forecast

[RichardColeman]

18 hours ago, webfact said:

“The growth would be higher next year than this year, but it remains below potential of 3.5-4 per cent,” he told the seminar’s participants

Sure the unemployed and probably unemployable 1,000 factory workers will be over the moon about that

[Srikcir]

18 hours ago, keith101 said:

That's because they didn't cut it far enough . To little to late to have a real affect .

Nov 7, 2019 - Amornthep Chawala, head of research at CIMB Thai says central bank's rate cut is too small and too late. https://www.nationthailand.com/business/30378128

Policy rate should have progressed to 1.0% by Q3, then now to 0.5% after none of its economic toolkit of currency manipulations throughout the year have failed to stabilize economic growth.

[Redline]

The pathetic educational system, unfair judicial system, monopolies and corruption, laziness, no enforcement of laws, misguided government spending, huge inequality, antiquated rules regarding investment and immigration, lack of technological expertise, the unwillingness to pay for foreign expertise the solve major issues, pollution...

 

It’s a sad situation, and these are completely solvable issues.  There are concrete steps to be taken to resolve issues, but the people in charge like the system now, even though it is to the detriment of the country and its people.

 

With its natural beauty and location, Thailand should be one of the most prosperous nations in Asia.

Instead it looks like its best times are behind it for the midterm at least ????