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UTCC's forecasting center: Drought situation could probably pull GDP down by 0.85%

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UTCC's forecasting center: Drought situation could probably pull GDP down by 0.85%

BANGKOK, 20 April 2016 (NNT) - Thanawat Phonwichai, director of the Center for Economic and Business Forecasting of the University of the Thai Chamber of Commerce (UTCC) disclosed that droughts were causing serious concerns and could probably last until June.


"Given an estimated 119 billion baht in enormous damage due to droughts, we expect economic growth to drop to only 2.7-2.9 percent this year, compared to a 3-3.5 percent growth previously forecast," Mr Thanawat said.

However, he said the government's recent economic stimulus packages were expected to help offset the negative impact of the drought.

Measures include a 70-billion-baht drought remedy program for farmers through the civil-state policy, 10.5 billion baht in cost-of-living allowances for low-ranking civil servants and 20-30 billion for the "Shopping for the Nation" campaign late last year which encouraged taxpayers to spend up in return for tax rebates.

The droughts were estimated to cause some 60 to 70 billion baht in losses or 0.85 percent of the GDP, provided that rainy season will start as normal later this year.

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Thai GDP forecast for 2016 is 2.8%. Compare that to Vietnam's 2016 GDP forecast of around 7%. No prizes for guessing which direction the economy of Thailand is headed in future years.

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we expect economic growth to drop to only 2.7-2.9 percent this year, compared to a 3-3.5 percent growth previously forecast

In other words GDP growth no better than actual growth 2015. Compared this new prediction to the World Bank prediction in March 2016 that Thailand’s growth will contract to just 2.0% growth in 2016.

the government's recent economic stimulus packages were expected to help offset the negative impact of the drought

Okay …. but that means net zero growth contribution to GDP in 2016. That leaves tourism that accounts for only 10% of GDP to carry the full weight of Thailand’s GDP growth as exports will contract for the next 2-3 years according to Chairman of the Thailand Development Research Institute Somkiat Tangkitwanich.

Thailand’s economy is continuing to deteriorate beyond the ability of the junta to control growth.

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