BANGKOK, Sept 30 –The Bank of Thailand (BoT) will reduce its projection of the country’s 2013 gross domestic product (GDP) growth to 4.2 per cent due to less-than-projected expansion in July and August, a senior bank official said today.
Mathee Supapongse, senior director of the bank’s Macroeconomic and Monetary Policy Department, said the Thai economy has encountered several internal and external risk factors including clarity of the US Federal Reserve’s quantitative easing (QE), the economy in the European Union which has yet to fully recover, and disbursement of the government’s 2013 budget, which is below its projected level.
He said the government’s inability to disburse the 2014 budget as of October 1 – the start of the new fiscal year – would not affect the economic system since the government would be allowed to spend on a routine basis.
Implementation of the 2014 Budget Bill, already passed by parliament, has been stalled pending a ruling by the Administrative Court following a petition by the opposition bloc.
Mr Mathee said consumption in the private sector expanded by 0.6 per cent last month compared to the same period last year but private investment shrank 4 per cent in accord with reduced imports of machinery, electronics and auto equipment.
Business confidence index dropped from 48.3 in July to 47.5 in August and the index for the next three months dropped from 53.3 to 51.7 due to an investment slow-down pending an economic assessment.
On the brighter side, exports in August expanded 2.5 per cent – a positive sign given a deficit by 1.3 per cent in the preceding month. August’s export volume was US$19.991 billion.
The improved exports contributed to a positive sign in manufacturing for export which shrank less from 4.9 per cent to 3.1 per cent last month.
Foreign capital outflows in August reached US$4.6 billion, breaking down into sales of BoT bonds at $2.3 billion, government bonds at $700 million, and $1.6 billion in the Thai bourse.
The capital flows resulted in Thai currency depreciation to Bt32.15 against the dollar.
