Thai economy: Report forecasts 3.5 percent growth in 2015

[webfact]

ECONOMY
Report forecasts 3.5% growth in 2015
Petchanet Pratruangkrai
The Nation


Ian Pascoe

BANGKOK: -- The economy is expected to show stronger growth of 3.5 per cent next year after stumbling at an estimated 1 per cent this year - but that is still less than its sustainable rate of 4 per cent, according to Grant Thornton.

The brighter outlook reflects the stability of the economy through a functional government after the May 22 coup, and peaceful streets in Bangkok.

While this has been welcomed by business leaders, there are significant domestic and external factors that continue to weigh heavily on the economy, the professional-services firm said yesterday in its international business report for the third quarter.

Ian Pascoe, managing partner of the company, said increased spending on infrastructure projects by the government was a major driver of the economy. However, the fragile global economy is still worrisome, particularly the recession in Japan, as it will have an impact on Thailand's export expansion.

Although tourism is expected to continue increasing, income from the industry will not be as much as in the past, as most visitors will be budget tourists rather than big spenders because of the global economic slowdown.

Foreign direct investment will also stay flat because foreign investors are tending to look at other Asean countries besides Thailand. Some prospective newcomers will worry about laws and regulations, as the military regime has plans to amend the Foreign Business Act. Those new investors may want to see a clearer picture to be sure that the amendments will not affect them negatively.

Because of many concerns, consumption will remain low, while household debt is expected to rise further.People are still worried about the military's programme to rewrite the country's constitution and the stated plan to hold an election next year. If the government can convince doubters that Thailand will have a fair and transparent election, it will be a positive sign to boost confidence next year.

The Grant Thornton study also found that more than 10 years of political volatility had blunted Thailand's competitive edge. Growth in global gross domestic product has plunged in the past decade, as has Thailand's.

Normally, Thailand's GDP needs to rise by 4 per cent each year to keep up with population growth, but household debt will further depress that.

However, increased stability should boost household confidence and see consumption pick up by 3.2 per cent in 2015 and 4.2 per cent in 2016, the study forecasts.

Rising energy costs are a problem across the region and for Thai businesses. This highlights business concern around the potential removal of massive fuel subsidies that the government has put in place to keep a lid on inflation.

More than half of business leaders also cite a lack of skilled workers as a handicap. The ageing of the population and low technology development and low productivity, but higher wages, are also hindering economic growth in the long run, the study found.

Source: http://www.nationmultimedia.com/business/Report-forecasts-3-5-growth-in-2015-30248158.html


-- The Nation 2014-11-20

[kalbo123]

And Grant Thornton is....a future teller?

[shirtless]

They should not make predictions as time usually proves them wrong, next month we will see that the growth figures will be downgraded as they have done all this year.

[yellowboat]

Most financial people get it wrong.

[Krataiboy]

A big fat slice of pie in the sky. Pascoe's forecast is predicated on "stability". Yet the world economy is in turmoil -with Germany and Japan facing recession, and the domestic situation looking increasingly uncertain, both economically and politically.

Edited November 20, 2014 by Krataiboy

[RustBucket]

We have had 4% 5%, 6% forecast for the remainder of 2014 since the coup and that figure is down to between 0.6 and 1% from two different sources.

What they are doing is trying to hoodwink foreign investor into putting money into this drain.

The reality is going to be recession and i am seeing signs of it, the biggest sign is when people start lying about economic growth..... That is the biggest alarm of the lot... They say Japanese trade is on the up... It is actually on the way down.

It's a bit desperate when a ministry has to resort to blaming the fact that car manufacturing is moving from Thailand to Indonesia as being an effect of Ebola.

Thailand.... you couldn't make it up.

[wabothai]

Forecasts are not taken serious any more. Sorry !!

[elgordo38]

I am going to mark 3.5% on my December page on my 2015 calendar. All I have to do now is find a calendar

[losworld]

dreamers I would say 1.5 percent if they are lucky and don't forget inflation is part of the growth figure.

[rickirs]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

And Grant Thornton is....a future teller?

You should seriously consider doing a little research.

"Grant Thornton" is a US franchise that is part of Grant Thornton International Ltd. GTIL is one of world’s largest organizations of independent audit, tax and advisory firms. It competes for professional services with companies such as KPMG LLP, PriceWaterhouseCoopers LLC, Ernst & Young LLP, and Deloitte Touche Tohmatsu (aka the Big Four).

If there was ever a fortune teller for economic performance these five companies would be at the forefront.

[Don Aleman]

Of the 43 "reports/projections" I've read, ranging from 1.6 % to 5 %, I suspect all have been injesting an illegal substance. It won't hit 1 % !

[rickirs]

Comparing Grant Thornton’s projected growth of 3.5% for 2015:

2014-09-29 Bank of Thailand 4.8%

2014-09-30 Finance Minister Sommai Phasi 4.5%

2014-10-16 Deputy Prime Minister Pridiyathorn Devakula 4% and higher.

2014-10-17 Kasikorn Research 4.8%

2014-10-17 World Bank 3.5%

2014-11-11 Dhurakij Pundit University 3.28%

2014-10-29 Office of the National Economic and Social Development Board 3.5% to 4.5%

Grant Thornton’s projection seems reasonable at this time, if not on the high side.