The Bank of Thailand (BOT) has lowered the gross domestic product (GDP) forecast of the country for 2015 to 2.7% due to the volatile global and domestic economic situation.
BOT Assistant Governor for Monetary Policy Mathee Supapongse said the BOT’s latest estimate is attributed to the tense world economy and unpredictable financial market led by the lackluster economy in China and unforeseeable interest rate adjustments by the U.S. Federal Reserve. The slowdown in the country’s exports also influenced the BOT’s GDP forecast.
The central bank earlier estimated this year’s GDP at 3%, according to a report by the state-run National News Bureau of Thailand.
Mathee also told a news conference the central bank had slashed its export growth projection from 1.5% to a much bigger 5% decline. Thai exports make up about 60% of the economy.
According to the central bank, the government’s economic stimulus measures may somewhat boost consumption. But the problems in the agricultural sector, especially the drought crisis and falling farm product prices, are too severe for these measures to handle. Mathee said the government’s economic plans should yield solid results next year.
The central bank has also brought the 2016 GDP estimate down to 3.7% after raising it to 4.1% in June, and slashed its 2016 export growth forecast to 1.2% from 2.5% earlier this year.
Early this month, the Thai government unveiled a new economic stimulus plan intended to help generate new investments and encourage further investments in the special economic zones (SEZs). Board of Investment of Thailand (BOI) Secretary General Hirunya Suchinai said the BOI is considering increasing more benefits to attract investments in the country, while more proper business categories would be added to the existing 13 categories for investing in the SEZs within this month.
Meanwhile, the chairman of the Federation of Thai Industries, Suphan Mongkolsuthee, said the downward adjustment of the country’s GDP and export growth targets by the BOT was not a cause for concern and was not unexpected.
He also advised business operators to develop their English skills ahead of the ASEAN Economic Community launch, saying the regional integration is a boost to Thailand’s trade and investment, and a good opportunity for the transportation sector.
Photo: DaveMWeber
