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SCB still has confidence in Thailand’s economic foundations

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SCB still has confidence in Thailand’s economic foundations

Tanakorn Sangiam

 

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BANGKOK (NNT) - Thailand is one of several countries suffering from the trade war between the U.S. and China, affecting the country’s growth in the export sector and raising the value of the Thai currency, forcibly making Thai exports less competitive. The overall Thai economy however remains robust following the government’s investments in large projects and the Eastern Economic Corridor.

 

Siam Commercial Bank’s (SCB) Economics Intelligence Center (EIC) estimates the export sector this year will shrink by 2.5 percent, while the tourism sector will generate less income due to lower spending by tourists because of the higher value of the Thai Baht, despite tourist numbers reaching the 40.1 million persons goal.

 

The center has reported that domestic consumption is showing signs of a slowdown, especially in the private sector, as seen from lower sales of housing and motor vehicles, while financial institutions have become more stringent when offering loans, due to higher household debt.

 

Noting these factors, the EIC has adjusted its Thailand 2019 economic growth projection from 3 percent down to 2.8 percent.

 

However, the center has commented that the foundations of the Thai economy remain robust thanks to large investments by the government, including investment in the Eastern Economic Corridor (EEC), while the government’s planned economic stimuli should help generate greater cash circulation in the remainder of this year, such as the Chim Shop Chai - Eat Shop Spend campaign, that has helped boost the consumption rate and spurred economic expansion.

 

The EIC also expects that the Monetary Policy Committee might lower the policy rate once again in Q4 2019, bringing down the rate to 1.25 percent, which would help shield the economy from external factors. The center has forecast Thailand’s economic growth in 2020 to be 2.8 percent.

 

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-- © Copyright NNT 2019-10-13

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