Economic growth projection cut to 3.8 %

[Thaivisa News]

Bangkok: – The Bank of Thailand has reduced this year’s projection for economic growth from 4 per cent to 3.8 per cent.

The country’s exports will likely grow by 0.8 per cent and not 1 per cent as in the previous forecast, bank’s assistant governor Mathee Supapongse said.

The revised lowering projection for 2015 is attributed to a number of factors, including the slower-than-expected economy in the last year’s fourth quarter.

Government and private-sector spending has slowed down. Business confidence in the first two months of this year has dropped. And the recovery of the world economy has been slow.

The economies of China and India are slowing down. Prices of consumer goods have been on the downward trend in accordance with the lowering oil price and this will in turn adversely impact on the exports growth.

Mathee said the Thai economy is not heading for a recession. He said he believes the economy will still see incremental growth rate at each quarter of this year.

As efforts are being made to lower household debt, to boost exports and to increase government spending, next year should see a higher growth rate at 3.9 per cent, he said.

The business confidence will rise once the domestic and international demands show a clear sign of recovery. Private investment is expected to pick up pace in the second half of this year.

This year’s inflation would be lowered than expected. The previous inflation forecast was 2.5 per cent plus or minus 1.5 per cent.

But the actual inflation rate is likely to be 0.2 per cent and the first half of this year will see negative inflation rate. This is attributed to the lowering oil price.

The lower-than-expected inflation should not be construed as deflation as this is a temporary phenomenon caused by the drop in oil price.

[ChrisY1]

Cutting forecasts of growth already........and it's only March.........!!

[clockman]

Vietnam is doing better! Asean is coming.

[elgordo38]

As efforts are being made to lower household debt? Is the government giving away free money or will they lower interest rates into the minus category for savers?

The lower-than-expected inflation should not be construed as deflation as this is a temporary phenomenon caused by the drop in oil price. I think the drop in oil price will be more than a temporary phenomenon

[Srikcir]

Part of the reason for the lower growth rate was "more delays to government spending than expected, especially in public investment,"

As this delay continues each week so will the predicted growth rate continue to lower. Expect to see a 3.5% predicted growth rate by April 2015. Thereafter, each quarterly growth rate must EXCEED 4.5% for Prayut's predicted annual growth rate form 2015 to sustain an average 4% rate. More practically, the 2015Q1 will be 2.8% and the 2015Q2 will be 2.5%.

Thus, Thailand will sustain the lowest GDP growth rate in the ASEAN Community. Congradulations General Prayut!

Edited March 21, 2015 by Srikcir