TMB analytics trims 2015 Thai GDP growth forecast to 3.5 percent

[webfact]

TMB Analytics trims 2015 GDP growth forecast to 3.5%

BANGKOK, 24 December 2014 (NNT) – TMB Bank's research institute TMB Analytics has revised its GDP growth forecast for year 2015 down to 3.5%, after determining that the economy was recovering more slowly than earlier expected.

According to Bencharong Suwannakhiri, senior director of TMB Analytics, an analysis of the institute has predicted the slower recovery will be caused by lower-than-expected levels of consumption, investment and state budget disbursement. The persistently low prices of farm produce have also resulted in household debt remaining at a high level.

Meanwhile, the industrial sector – notably the automotive industry – has not returned to strength. TMB Analytics therefore toned down its 2015 GDP growth estimate to 3.5% from the previous 4% estimate.

Mr. Bencharong noted, however, there are positive factors that are coming into play, such as the ASEAN Economic Community. The lower price of oil means inflation is no longer a major concern, and the policy interest rate is expected to be maintained at 2% per annum throughout 2015.

The senior director also noted that for the short-term, attention must be kept on the problem facing the Russian currency. Russians make up 6% of foreign tourist arrivals to Thailand and they account for 10% of spending by foreign tourists.


-- NNT 2014-12-24

[chainarong]

Try 2.8% .

[Anthony5]

Wow, 2015 hasn't started yet and they are trimming the forecasts for the year end already.

Sounds promising.

[Thai at Heart]

Funny this. The Thai MILITARY bank briefing against the Junta

Court Martial them I say

Edited December 24, 2014 by Thai at Heart

[rickirs]

Gen. Prayuth lost all creditbility with his economic planning for Thailand.

Just two weeks ago Gen. Prayuth predicted, "When infrastructure development and measures to support farm products were included, the Thai economy should grow by 3.5-4.5 per cent next year".

This was only two days ago that Charl Kengchon, KResearch managing director, said "he doubted the 4-per-cent growth target next year was achievable." Two weeks ago even to Industry Minister Chakramon Phasukvanich said, "as economic growth next year was expected at between 3% and 3.5% following government’s remedial measures to subsidise farmers, and mega project spendings, the industry will benefit from the growth." And a month ago the international consulting company Grant Thornton predicted 3.5% growth rate for 2015.

What the economy needs is a massive and immediate investment in the nation's infrastructure to achieve even 3.5% growth rate in 2015. Most of the experts agreed EXCEPT for Somkid Jatusripitak, an adviser to the NCPO, who argued against "an injection of capital" into the economy (The Nation 2014-11-20). It looks like Gen. Prayuth is following Somkid's advice. Prayuth has stalled significant government investments, for example choosing to hand economic stimulus to China who will invest its own capital into the Thai infrastructure instead. Thailand will be fortunate to see 2.5%-3% next year. Anything below 2% could trigger deflation.

Gen. Prayuth means well for the nation. Unfortunately, that's not enough to save the economy in 2015 that has been crippled by the military coup and consistent mismanagement of its economy. Regardless of anyone's political preference, all Thais will suffer as a result. I don't think that's the national unity Gen. Prayuth wanted to achieve!

[Thai at Heart]

Gen. Prayuth lost all creditbility with his economic planning for Thailand.

Just two weeks ago Gen. Prayuth predicted, "When infrastructure development and measures to support farm products were included, the Thai economy should grow by 3.5-4.5 per cent next year".

This was only two days ago that Charl Kengchon, KResearch managing director, said "he doubted the 4-per-cent growth target next year was achievable." Two weeks ago even to Industry Minister Chakramon Phasukvanich said, "as economic growth next year was expected at between 3% and 3.5% following governments remedial measures to subsidise farmers, and mega project spendings, the industry will benefit from the growth." And a month ago the international consulting company Grant Thornton predicted 3.5% growth rate for 2015.

What the economy needs is a massive and immediate investment in the nation's infrastructure to achieve even 3.5% growth rate in 2015. Most of the experts agreed EXCEPT for Somkid Jatusripitak, an adviser to the NCPO, who argued against "an injection of capital" into the economy (The Nation 2014-11-20). It looks like Gen. Prayuth is following Somkid's advice. Prayuth has stalled significant government investments, for example choosing to hand economic stimulus to China who will invest its own capital into the Thai infrastructure instead. Thailand will be fortunate to see 2.5%-3% next year. Anything below 2% could trigger deflation.

Gen. Prayuth means well for the nation. Unfortunately, that's not enough to save the economy in 2015 that has been crippled by the military coup and consistent mismanagement of its economy. Regardless of anyone's political preference, all Thais will suffer as a result. I don't think that's the national unity Gen. Prayuth wanted to achieve!

Their problem is that they have a tax deficit and even if they were to inject money into the economy, not enough of it finds its way back in tax.

To borrow to fund GDP growth only is sustainable if the money comes back to fund the borrowing. I hate to say it, but they should raise VAT on some things and exempt others and then put stimulus in. The money turns, the economy grows and revenue comes back in to fund the borrowing.

If not, debt to GDP will evwntually get out of control. They won't get 4% GDP growth. Just loom at tourism, 10 to 20%down. Well there is a drop of GDP of 1% to 2%.