Thailand: NESDC lowers forecast

  • Thailand’s slow economic growth in the 2Q19 has prompted the state planning unit to lower its forecast for 2019 growth to 2.7-3.2% from 3.3%-3.8% made in May 19.
  • It also sharply cut its estimate for 2019’s exports to a contraction of 1.2% from 2.2% growth earlier.
  • Tim Leelahaphan, a Standard Chartered economist, said reasons for the 2Q19 slowdown include the troubled post-election political transition, which delayed the new cabinet’s policy announcement to late Jul 19; low private sector confidence; and negative export growth, especially for electronics, since late 18 amid the US-China trade dispute.
  • The Bank of Thailand’s measures to curb auto loans and household debts, the drought, a delay in fiscal 2020 budget disbursement to Jan 20 (from Oct 19), and worsening global trade are expected to continue to affect the economy.
  • However, he expects a rebound starting from late 3Q19 as the political situation has been improving, despite some noise, and stimulus measures to shore up domestic activity are likely to be implemented soon using the available budget for the current fiscal year.

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