Bank Of Thailand Expected To Lower Growth Forecast

[webfact]

BOT expected to lower growth forecast

SARUN KIJVASIN

THE NATION

BANGKOK: -- The Bank of Thailand is likely to revise downward its economic growth forecast due to the weakening global economy that has continued to dampen merchandise exports although domestic consumption and tourism are still expanding.

Private investment has decelerated but capital inflows last month reached Bt100 billion.

"It is likely that the central bank will revise down the economic projection during the meeting of the Monetary Policy Committee on October 17 as the weakening global economy has adversely affected exports," said Mathee Supapongse, senior director of the macroeconomic and monetary policy department.

"However, as Thai exports also depend on imports, deceleration of exports will also reduce imports, so the net negative impact on the economy will not be much.

The impact will be greater if the country faces only an export slowdown," he added.

The central bank has projected economic growth rate of 5.7 per cent and 5 per cent this year and next year respectively.

Export value in August contracted 5.1 per cent year on year, and the central bank will also revise downward its export projection. But there is a chance that exports will return to positive in the fourth quarter as more orders are expected during holiday festivities such as Christmas, he said.

The troubled global economy has also affected goods output with the Manufacturing Production Index (MPI) contracting by 11.3 per cent year on year last month.

Domestic consumption and tourism continued to expand as tourist arrivals increased 11.8 per cent year on year to 1.9 million.

Tourists from the Middle East increased last month after the number fell in July.

MALAYSIAN TOURISTS

Tourists from Malaysia also rose, indicating they were less worried about safety following car-bomb attacks in March in Songkhla province.

Consumers continued to spend money as indicated by a 4.1-per-cent year-on-year rise of the Private Consumption Index.

The index also increased 0.5 per cent from the previous month, largely driven by the first-car ownership scheme.

Farm income rose by 3.8 per cent year on year, mainly from an increase in agricultural production of 19.4 per cent. But farm product prices contracted by 13.1 per cent year on year, due mainly to declining rubber price.

Meanwhile, private investment expanded at a slower pace, partly as investments for replacement and repairs of flood-damaged properties started to wane.

The Private Investment Index increased by 14.2 per cent year on year, moderated in tandem with machinery and equipment investment, particularly in imports of capital goods.

Banks' lending in August increased 15.9 per cent, decelerating from a 16.5-per-cent expansion in July. Consumer loans expanded 17 per cent, slowing down from 17.2 per cent in July. Business loans increased 14.6 per cent, also declining from a rise of 15.5 per cent in July.

Thailand had a current account surplus of US$858 million or about Bt26.5 billion. Net capital inflows amounted to $3.34 billion. Foreign fund flows entering the stock and bond markets amounted to $268 million and $1.02 billion respectively, according to the central bank.

Inflows from Thai investors who previously invested in foreign assets amounted to $1.47 billion.

-- The Nation 2012-09-29

[asiawatcher]

"Tourists from Malaysia also rose, indicating they were less worried about safety following car-bomb attacks in March in Songkhla province."

What Malaysian tourism targets going to Songkhla? News to me...

[Markaew]

I don't believe any of this propaganda about tourism increasing. This is typically low tourism season now but extraordinarily low in Bangkok now. Not nearly as busy as the past.

[smedly]

and what is missing from this report unless I missed it is the most important figure of all "Thai Debt Level or borrowing" which I assume has gone up so much they don't want to report it

[Rosco911]

I don't believe any of this propaganda about tourism increasing. This is typically low tourism season now but extraordinarily low in Bangkok now. Not nearly as busy as the past.

Chaing Mai has seen the lowest amount of tourists in the past 7 years. Where are all these tourist going ?

[noitom]

Maybe Thailand should pull out all the stops and "beef up" their world class sex trade and illicit intellectual property counterfeit business. Thailand has no peer when it comes to the sex trade as anyone can openly see and if Thais stick to their expertise, it will pay off.

[dcutman]

"However, as Thai exports also depend on imports, deceleration of exports will also reduce imports, so the net negative impact on the economy will not be much.

This sentence/quote blows my mind. Can anybody explain how this is a good thing.