The prolonged economic slowdown is having an impact on factory employees because the exporters of outdated products have had to trim OT, Sutapa Amornvivat, chief economist and first executive vice president, said yesterday.

In the fourth quarter of last year, OT pay in the electronics industry fell by 12 per cent and in the auto industry by 1 per cent year on year.

Employees in the North, West and East were especially stretched financially by the loss of OT pay.

Even though the tourism industry is still growing, OT pay to hotel and restaurant workers dropped by 3 per cent. Wholesale and retail OT pay slipped 5 per cent in the quarter.

Manufacturing and service employees have the purchasing power to patronise trading chains and banks, so the decline in income of these people is reflected by rising non-performing loans and the need for higher loan-loss provisions in the banking industry.

“We are following the effectiveness of the government’s stimulus packages to see if they can help enough to [sustain] private consumption,” she said.

Even though the unemployment rate is only 0.9 per cent, among the lowest in the world, the reduction of OT pay is an indicator of the income shock effect.

This will put pressure on private consumption, so the EIC revised down its forecast for private consumption growth to 1.9 per cent this year from 2.1 per cent predicted three months ago.

The research unit of Siam Commercial Bank also cut its forecast for export growth from flat to minus-2.1 per cent this year.

However, the EIC has maintained its growth forecast for 2016 gross domestic product at 2.5 per cent, assuming public investment in the second half will go ahead as scheduled.

The EIC now predicts public investment growth this year will improve to 11 per cent from the 9 per cent predicted earlier.

However, the GDP growth estimate might be lowered from 2.5 per cent if the export sector and public investment do not revive in the second half.

“We don’t see any advanced markets that are heroes to drive the global economy. Even though the US is showing signs of recovery, its employment rate and construction data are not good enough,” Sutapa said.

The Bank of Thailand is expected to leave the policy rate at 1.50 per cent this year because it is giving importance to the efficiency of the policy rate and a suitable rate to discourage search-for-yield investors, she added.