InfoQuest (April 19, 2019) -- In 2019, the Thai economy is projected to grow by 3.8 percent, according to Mr. Veerathai Santiprabhob, governor of Bank of Thailand (BOT), the central bank of Thailand. Although slightly lower than last year, this figure is still considered reasonable given Thailand's economic growth momentum.
BOT held that the Thai economy could take a turn for the better in the second half of this year due to a likely pickup in the global trade market, for the trade war in the first half of this year has dealt a real blow to Thailand and many other countries. Looking ahead, Thailand is faced with both unfavorable and favorable factors.
Out of fears for possible trade barriers by America and China, the Thai business world has beat the clock in ordering imports since late 2018, which results in a lower-than-normal number of procurement orders and products in early 2019. That provides a way in which this trade row saps the Thai economy.
But there are also some favorable factors. First, with the gradual decrease in the inventory of the ordered products, the output will see an increase in related countries including Thailand which will deliver growth in exports in the second half of this year.
Second, as the investments expand, some production bases that have been relocated to Thailand will come on stream also in the second half of this year.
Third, as a new government will take office and introduce a package of policies in the second half of this year, the Thai economy is on track to enjoy a recovery from previous downturn thanks to the economic stimulus by the new administration.
"Based on those assumptions about the Thai economy for the second half of this year, the Thai economic forecasts for this period will be better than in the first half of the year", said Mr. Veerathai Santiprabhob.
He added that if the establishment of a new government is completed by June, BOT's economic growth forecast of 3.8 percent will remain unaffected. But if that time is delayed, say August or September, or still not decided, it will influence the economic activities in Thailand, including some new investment projects led by the government and those projects under the budget for 2020 fiscal year which will be left to the discretion of the House of Representatives. Moreover, if the establishment is delayed, the grant budget for these new projects will also be postponed accordingly.
At the moment, the private sector is waiting for the coming new government to make some related decisions, for example, a hike in the minimum wage.
Meanwhile investors are keeping a close eye on the developments of global trade negotiations, and countries that are in the middle of trade negotiations with Thailand are also waiting for the establishment of a new government, hoping that progress can be made in their ongoing trade negotiations with this country as soon as possible.
"If the establishment of a new government is delayed, the political uncertainties and jitters could effect this year's economic growth. But if a new government can be set up by June, our BOT's economic forecast will remain unaffected", said Mr. Veerathai Santiprabhob.
Source: InfoQuest, by Kasamarporn Kittisamphan / Rachada / Nisarat, translated by Xinhua Silk Road
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