Posted on 28 Jun 2013
Thailand's economic growth will likely be lower than 5% this
year, probably towards the lower end of the revised forecast of 4.2% to 5.2%,
says the National Economic and Social Development Board.
Deputy secretary-general Porametee Vimolsiri said the
slowing global economy and baht volatility are weighing on exports
The government's think tank has cut its gross domestic
product (GDP) growth forecast for 2013 from a range of 4.5% to 5.5% after
first-quarter economic growth of 5.3% year-on-year was lower than expected.
Economic indicators show that growth may tilt towards the
lower end of its forecast. Monetary policy should lend support to growth
because inflation is in check
"Growth may not reach 5%. From what we see now, 5% is
difficult," Mr Porametee said on the sidelines of an economic seminar
hosted by Thansettakij newspaper yesterday.
In the first quarter, the government's stimulus measures
including the first-time car buyer scheme had a lower effect on boosting the
economy than they did last year.
"GDP growth is not strong, clearly stating the status
of the global economy. Yet the first quarter will likely be the strongest one
this year," Mr Porametee said.
Foreign exchange is critical for the country to achieve its
export growth target of 9-10%, he said.
With impetus from the 350-billion-baht water management
programme and 2-trillion-baht infrastructure scheme, which are due to be
endorsed by parliament in October, the economy will be on course to expand by
5% next year, he added.
The Finance Ministry's Fiscal Policy Office yesterday
slashed its 2013 economic growth forecast to 4.5% from an earlier projection of
4.8% due to anemic domestic consumption and private investment plus China's
slowdown.
Director-general Somchai Sujjapongse said economic
indicators in May still signalled a slowdown in the economy, as there was weak
demand in both the domestic private sector and the global market.
Domestic private consumption is projected at 3.6% in the
second quarter, down from 4.6% in the first quarter. Private investment is
projected at 5.7% in the second quarter, down from 9.3%.
Lower rubber and palm oil prices contributed to a decline in
household income in the agricultural sector, while the automotive sector also
experienced slower sales as delivery of cars under the first-time car buyer
scheme was almost completed, said Mr Somchai.
New-vehicle sales declined by 3.5% to 111,848 in May, ending
a 17-month rising streak.
Mr Somchai said lower private consumption leads to
diminished investment incentives in the short term.
Since private consumption makes up more than half of GDP, a
slowdown in private consumption could lead to sluggish economic growth in the
long run, he said.
Exports to important trade partners China, Singapore and the
EU fell by 5.2% year-on-year.
Provided there is no extreme slowdown in the Chinese
economy, the Thai economy can withstand the impact, said Mr Somchai.
He said public spending on megaprojects will draw more
capital and drive up growth this year.
Mathee Supapongse, the Bank of Thailand's senior director
for macroeconomic and monetary policy, said the central bank will probably
lower this year's export growth forecast after exports last month shrank 5.3%
year-on-year as a result of the baht's appreciation and China's economic
slowdown.
