BANGKOK, 27 December 2013 – The Fiscal Policy Office has revised its GDP growth forecast for 2013 and 2014, with the economy now expected to expand just 2.8% this year.
Somchai Satchaphong, director of the Fiscal Policy Office (FPO), said on Thursday his office now expects the economy to expand only by 2.8%, compared with an earlier forecast of 3.7%. The downward revision was due to the sluggish recovery of the global economy – which affected Thai exports – and the decline in consumption and private sector investment that came about because of reduced confidence level after parliament dissolution, and expectations that state sector investment could be delayed.
In addition, further prolonging of political demonstrations could cause the number of foreign tourist arrivals to decline by 300,000. Such prolonging would also be detrimental to investors’ confidence, and would cause next year’s GDP expansion rate to dwindle to 3.5%. The earlier forecast for 2014 GDP growth was 4%, Somchai said.
Mr. Somchai noted, however, that the Thai economy was still sitting on solid a foundation, with desirable levels of foreign reserves, budget surplus, and inflation.
