BANGKOK, May 20 – Thailand’s gross domestic product (GDP) forecast is lowered from 4.5-5.5 per cent to 4.2-5.2 per cent due to the disappointing Q1 economic growth of 5.3 per cent, below the previously forecast 6-7 per cent, a senior official said today.
Arkhom Termpittayapaisith, secretary general of the Office of the Economic and Social Development Board (NESDB), said Thailand’s Q1 economic expansion at 5.3 per cent this year is far below last year’s Q4 growth of 19.1 per cent.
Household spending increased by 4.2 per cent, a sharp drop from last year’s Q4 at 12.4 per cent while last year’s Q4 investment at 22.9 per cent dropped to only 6 per cent in Q1.
The Q1 export volume in dollars increased 4.5 per cent, almost half below the government’s 9 per cent target while the NESDB earlier forecast an 11 per cent growth, he said.
The export volume in baht increased by only 0.5 per cent given the surging Thai currency which has resulted in a Bt181 billion loss, he said, predicting Thailand’s export value to grow at only 7.6 per cent this year, much below the original 11 per cent forecast.
He called on the Bank of Thailand (BoT) to give more emphasis on stabilising the baht than concentrating on inflation.
Q1 inflation remained at 3.1 per cent and it should be around 2.3-3.3 per cent this year.
Mr Arkhom said the ‘currency war’ and unusual inflows of foreign capital are immediate problems that should be urgently addressed by the central bank, referring to the foreign capital inflow of US$4.5 billion in the past three quarters.
The capital inflow in Q1 was US$4.775 billion, higher than the annual average value at US$2.2 billion.
He said a reduced policy interest rate would be the best solution to deter foreign capital inflows and that the BoT should enforce appropriate measures to create awareness among foreign investors that Thailand is not a haven for baht speculation.
A predicted global economic expansion of only 3.6 per cent and the continued appreciation of the baht are volatile factors for Thailand’s exports, he said.
