BOT to announce higher 2015 GDP growth

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BOT
BOT to announce higher 2015 GDP growth
Erich Parpart
The Nation

BANGKOK: -- The Bank of Thailand foresees a better-than-expected ending for the economy this year, despite the anticipated action on interest rates by the US Federal Reserve.

At its final meeting of the year yesterday, the central bank's Monetary Policy Committee (MPC) slightly revised up its 2015 growth forecast, while keeping the 2016 forecast unchanged.

The new forecast for this year will be announced in the MPC's minutes, to be released on December 25.

The bank's current forecasts are for 2.7-per-cent expansion this year and growth of 3.7 per cent for 2016.

"Economic expansion this year is expected to be slightly better than what we previously assessed," Jaturong Jantarangs, secretary of the MPC, said after the meeting.

The committee decided to maintain the policy rate at 1.5 per cent, thanks to better-than-expected economic performance from July through October, when economic activities increased as higher public expenditure boosted the private sector's confidence.

Though exports declined and could face downside risks next year, the tourism industry is expected to remain buoyant, he said.

Meanwhile, headline inflation, at minus 0.97 per cent at the end of November, is expected to return to positive territory in the first half of next year, as the base effect of high oil prices wanes.

The policy interest rate was maintained for the fifth time since the rate was cut at both the March and April meetings, even though the US Federal Reserve was expected to announce a rate hike at 2am Bangkok time today.

The Fed's anticipated move is expected to encourage capital outflows from emerging markets to the US, which will in effect weaken emerging-market currencies, including the baht. The baht traded at 35.98 per US dollar as of 3pm yesterday. It stood at 32.95 per dollar at the beginning of the year.

Vallop Vitanakorn, vice chairman of the Thai National Shippers' Council, said he expected further baht depreciation if the US policy rate was hiked.

However, he added that the current exchange rate of close to Bt36 per dollar was accommodative enough for the export sector to post a 2-per-cent growth rate next year.

The sector depends more on a global economic recovery than on other factors, he pointed out.

Jaturong said the market consensus currently expected the US Fed's rate hike to be slow and unaggressive, as a rapid and aggressive move could hamper the global economic recovery, which would affect the US economy.

"The US is living in a world in which it cannot grow by itself, and aggressive hikes could create a negative feedback to the global economy. This would eventually go back to effect the US economy, and the Fed has to think about this," he explained.

Commerce Ministry data, meanwhile, shows that the Thai export sector, which contributes about 70 per cent of gross domestic product, contracted by 5.3 per cent in the first 10 months of the year.

The MPC's decision on the policy rate was anticipated, and Kasikorn Reaearch Centre expects the committee to maintain the rate at 1.5 per cent until the end of next year.

The research house also expects a gradual increase in US rates.

Expectations of a rate move by the Fed put pressure on the Thai stock market, which yesterday again closed below 1,300 points - at 1,299.12.

Foreign investors were net sellers of Thai shares, boosting year-to-date net-sells to Bt133.59 billion.

Source: http://www.nationmultimedia.com/business/BOT-to-announce-higher-2015-GDP-growth-30275075.html


-- The Nation 2015-12-17

[bangon04]

"The Bank of Thailand foresees a better-than-expected ending for the economy this year, "

Yes of course they do......

[Srikcir]

"The bank's current forecasts are for 2.7-per-cent expansion this year"

Sheer genius!

2015-02-02

"Don [Nakornthab, director of the Bank of Thailand Macroeconomic Policy Office] painted a gloomy picture of the Thai economy as last year it grew only 0.8 per cent while the central bank projected that this year’s gross domestic product would expand 4 per cent."

Missed his prediction by almost 150%. Applying that accuracy to next year gives a projected rate of 2.5%.