Kittiratt warns of stifled 2014 growth

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Kittiratt warns of stifled 2014 growth
Sarun Kijvasin
The Nation

As 'shutdown' wreaks economic havoc, MPC to meet as scheduled next week

BANGKOK: -- The Finance Ministry expects the prolonged political protest to drag down economic growth to only 3.1 per cent this year, while the Bank of Thailand insists its Monetary Policy Committee will meet on January 22 as scheduled.

Finance Minister Kittiratt Na-Ranong yesterday conceded the anti-government rallies had eroded confidence, domestic consumption and tourism, while gross domestic product is forecast to expand by only 3.1 per cent if the protests are protracted.

If the protests disrupt or delay the February 2 election, that could drag down GDP growth to 2 per cent, he said.

The Fiscal Policy Office has pegged next year's GDP expansion at 4 per cent.

DBS Vickers Securities (Thailand) said the February 2 election was now more likely to be delayed.

The Election Committee has asked Prime Minister Yingluck to postpone the polling, citing the possibility of violence breaking out if the snap election proceeds as scheduled.

Markets expect the central bank to lower its 2014 growth forecast to below 4 per cent at next Wednesday's meeting of the MPC, which will review the latest developments.

The MPC will gauge the impacts from the protests on economic activities before setting the policy interest rate, said BOT spokeswoman Roong Malikamas, who insists the MPC meeting remains on track.

Whether the temporary shutdown of the central bank's headquarters would be extended beyond today depends on the situation, she said.

"Now it's close to the MPC meeting and the silent period. The January 22 meeting will remain. However, the meeting venue cannot be disclosed," she said.

The BOT's business continuity plan (BCP), which was activated on Monday, continues as usual.

The money markets continued their normal functions with narrow-range movements for money-market rates.

The baht has been stable, appreciating slightly from last week.

The BOT has been in frequent discussions with commercial banks, which continue providing services to the general public.

Most of the banks can provide full services but have reduced the number of branch closures in the protest areas.

"Commercial banks' branches total more than 2,000. On the first day [of the "Bangkok shutdown" on Monday], about 123 branches, or about 5 per cent of all branches in Bangkok, were closed. On the second day, only 2 per cent were closed," she said.

About 35 automated teller machines encountered difficulties.

No irregularities were found in the payment system, while commercial banks' cash withdrawals from Monday-Wednesday had eased, as people had taken out money in preparation for the shutdown.

The central bank moved its back office to spare sites and its banknote service operation to Krungthai Bank's Central Pinklao branch.

"As discussed with banks, they insisted on their BCPs and no obstacles or problems for communicating with the central bank have been found yet.

"The public has not reported any problems to the central bank's hotline," Roong said.

-- The Nation 2014-01-17

[Thai at Heart]

Its the 16th of January.

My word they are getting their predictions in early.

[Nowhereman60]

Its the 16th of January.

My word they are getting their predictions in early.

Their predictions change every couple of days.

[Ricardo]

So the economic slow-down is nothing to do with the policies implemented, by the caretaker-minister's own government, over the past few years then ?

It's all down to people blowing whistles, over a couple of months, instead ?

Edited January 17, 2014 by Ricardo

[iancnx]

No growth more like.

[JoeThePoster]

I predict a stifled Kittirat in 2014.

[noitom]

The February election solves nothing.

[Pib]

Well, if the current govt is projecting a 3.1% growth rate you know that's a very optimistic guess (i.e., unlikely to come true and to be revised downloaded X-times).

Plus the finance minister is also saying the growth could only be 2% if the protests disrupt/delay the elections. Is that implying there has been no disruption already? Disruption don't necessarily have to occur on election day but disruption caused in the preceding days like some political parties not participating, registration impacts, etc., which has already occurred.

And with the rice buying scheme now missing/delaying payments to the rice farmers which will reduce GDP growth (and piss-off the farmers) along with the corruption investigation now involving the PM and 15 current/former govt officials, the economy is going to have a tough time this year. Possibly even GDP growth close to zero or below zero? I hope not, but many things aren't looking so rosy.

[ChrisY1]

Well, if the current govt is projecting a 3.1% growth rate you know that's a very optimistic guess (i.e., unlikely to come true and to be revised downloaded X-times).

Plus the finance minister is also saying the growth could only be 2% if the protests disrupt/delay the elections. Is that implying there has been no disruption already? Disruption don't necessarily have to occur on election day but disruption caused in the preceding days like some political parties not participating, registration impacts, etc., which has already occurred.

And with the rice buying scheme now missing/delaying payments to the rice farmers which will reduce GDP growth (and piss-off the farmers) along with the corruption investigation now involving the PM and 15 current/former govt officials, the economy is going to have a tough time this year. Possibly even GDP growth close to zero or below zero? I hope not, but many things aren't looking so rosy.

These dolts don't know how much rice has or hasn't been sold....how on earth can they manage the country....as for forecasting...it's purely throwing darts at the board....again....no idea only guesswork...imo

[bigbamboo]

I predict a stifled Kittirat in 2014.

Having left no money in the pot to pay them I bet the Thai farmers wish the Finance Minister had been stifled at birth.

Edited January 17, 2014 by bigbamboo

[Robby nz]

Now if Kitteratt and the other revolving chair ministers had the foresight to put policies in place to stimulate growth before the house was dissolved then the numbers would have been different, protests or not.

But instead they were relying totally on the 2.2 trillion to move the country forward.

Now it looks likely that it will be scrapped because of the senseless, corrupt and unlawful way in which they went about pushing it through.

Even if they are able to form a new Govt there will still be no ideas.