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Krungsri Research raises 2020 growth forecast by almost 4 percentage points


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Krungsri Research raises 2020 growth forecast by almost 4 percentage points

By The Nation

 

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Krungsri Research’s chief economist Somprawin Manprasert

 

Exports are driving the gradual recovery of Thailand’s economy, says Krungsri Research, but it warns that foreign tourists will not return in the large numbers of previous years.

 

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The research house has raised its 2020 GDP forecast to contraction of 6.4 per cent from 10.3 per cent. 

 

It projects 2021 growth at 3.3 per cent, citing both challenges and opportunities ahead.

 

The upward revision for 2020 reflects better-than-expected third quarter GDP data, accelerating public spending, and stronger merchandise exports, Krungsri Research’s chief economist Somprawin Manprasert said on Wednesday.

 

Thailand’s economic growth is expected to turn positive from the second quarter of 2021, supported by the low-base effect, government spending and a cyclical rebound of external demand.

 

“We see challenges ahead with domestic headwinds. Tourism recovery is lagging behind other economic growth drivers, leaving large excess capacity in several services sectors. Job losses will continue to weigh on income and consumer spending,” Somprawin said.

 

Domestic political unrest could undermine economic growth and trigger concern over continuity of policy. Historically, political disruption reduces growth by 0.6 to 1 percentage point, he said.

 

However, exports will become an engine of growth, with private investment in export-related sectors expected to improve moderately.

 

Economic opportunities will also arise from growing regionalisation, which could support Thai exports and domestic production in the medium term, he said.

 

Meanwhile new US policy under Joe Biden’s administration would only slightly benefit Thailand, as the US would maintain trade protectionism, according to Krungsri Research.

 

Krungsri Research’s key revisions:

 

• Foreign tourist arrivals to decline to 4 million in 2021 from 6.7 million in 2020.

 

• 2020 private consumption forecast raised from -4.2 per cent to -1.1 per cent. Growth of 2.5 per cent expected in 2021. 

 

• 2020 exports forecast raised from -12.5 per cent to -7.5 per cent, and 2021 exports forecast to expand 4.5 per cent..

 

• 2020 private investment forecast raised to -11 per cent. Forecast of 3.2 per cent growth in 2021. 

 

• 2020 public investment forecast growth of 12.5 per cent, followed by 10.5 per cent in 2021.

 

Source: https://www.nationthailand.com/business/30398560

 

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-- © Copyright The Nation Thailand 2020-11-26
 
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2 hours ago, webfact said:

Thailand’s economic growth is expected to turn positive from the second quarter of 2021, supported by the low-base effect, government spending and a cyclical rebound of external demand.

i can't say I know a huge amount about economics , but forecasting export growth - again - in a year of yet MORE thai baht appreciation seems nuts to me

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6 hours ago, webfact said:

Exports are driving the gradual recovery of Thailand’s economy, says Krungsri Research, but it warns that foreign tourists will not return in the large numbers of previous years.

What foresight, I wonder if they factored in the forever strong baht crippling exports.

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