Central bank forecasts lower GDP growth

BANGKOK: -- The Bank of Thailand says it will adjust its economic growth forecast this year of 3% after last month’s export figures fell by 8.9%.

BOT spokeswoman Mrs Rung Malikamas said yesterday that Thailand’s economic recovery is progressing at a snail pace as a result of many factors, of particular concern is June’s export figures which fell by 8.9% which was worse than the BOT’s earlier projections.

Expectations are that GDP growth projections will fall below 3% while exports will contract by 1.5% for the entire year.

She attributed the fall in consumption – which is a direct consequence of lower agricultural sector earnings; and low consumer confidence brought about by the recent nationwide drought crisis as the major factors contributing to the economy’s slow recovery.

Other factors such as financial institutions increased reluctance to grant loans and the devaluation of the baht, which now stands at 35.25 baht to a UD dollar, are also major contributors, she said.

Source: http://englishnews.thaipbs.or.th/central-bank-forecasts-lower-gdp-growth

-- Thai PBS 2015-08-01

Next BoT meeting is 5 August. Will they cut interest rates again to cause the baht to depreciate further? The focus on the woeful export numbers might be foreshadowing.

Puzzling as always. Surely the real picture is recession!

Next BoT meeting is 5 August. Will they cut interest rates again to cause the baht to depreciate further? The focus on the woeful export numbers might be foreshadowing.

It would make sense for them to do that if exports are the main focus. There are import issues though such as electricity which would favour a stronger baht, so I guess it depends how important each sector is. It could be a side bonus for the TAT if exports were the main concern.

Also, even if they have decided they want to weaken it, I would expect they'd do it in soft steps rather than worrying the markets, and also that a lot of other countries are in a race to the bottom with devaluation, so there are quite a few variables they'd have to consider.

"Expectations are that GDP growth projections will fall below 3% while exports will contract by 1.5% for the entire year."

Yesterday the United Overseas Bank projected GDP growth at 2.7% after BOT recently predicted 3%.

So BOT is just trying to catch up with the experts. In June 2015 BOT's Monetary Policy Committee revised down the 2015 economic growth forecast for the second time in this year, from 3.8% to 3%. In February 2015, Thailand's finance minister was told by Prayut to push for at least 4.0 percent growth for 2015.

Deputy PM Devakula's recent answer to economic growth is that it should increase when a dual-track railways project is completed in around five years.

If the current government didn't have a Minister of Finance or Deputy PM for Economic Policy, the nation wouldn't miss their absence.

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What happened to the dollar will never get to 35, now it is 35.25, and that was only said last week

All of this is really just all smoke and mirrors.

The big " R " has been in Thailand for some time now IMMHO