HSBC lowers Thai GDP growth forecasts

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation


Workers install portions of the exterior of a new condiminium building in central Bangkok./EPA

Workers install portions of the exterior of a new condiminium building in central Bangkok./EPA

HSBC lowers growth forecasts for Thailand to 2.8 per cent for both 2016 and 2017, from 3.0 per cent and 3.1 per cent, respectively, due to lingering troubles at home and additional headwinds to be introduced by Brexit.

In “Global Economics Quarterly: UK’s revolt, global jolt”, HSBC Thailand economist Nalin Chutchotitham said Thailand’s economy continues its moderate but uneven growth – tourism and fiscal spending continue to expand well, but private investment, private consumption, and exports are still struggling. Thailand’s exports and private investment are both likely to grow at a slower pace than previously forecast. Recent data also showed credit growth slowing, as well as weaker business and consumer confidence.

Though the Bank of Thailand repetitively said further rate cuts may have little impact on growth, given weak confidence and currently limited structural changes, HSBC considers that the weaker external environment now warrants pre-emptive policy action. It expects the central bank to cut the policy rate by 25 basis points to 1.25 per cent at the meeting in September and keep the rate unchanged until the end of 2017.

“An aggressive move is not likely at this juncture because the BOT would most likely want more time to assess the impact of the “Brexit” vote and other economies’ policy responses. Furthermore, monetary conditions remain accommodative, so the policy easing will be mainly a symbolic and a pre-emptive move,” Nalin said.

In a research note on June 30, United Overseas Bank also expected the Thai central bank to stay pat at the August meeting. Further monetary policy easing would provide limited support to the Thai economy as the sub-par economic growth was partly due to global and domestic structural problems.

The bank expected the baht to depreciate against US dollar due to uncertainties in the global financial market. The baht could end the year at Bt36.5 per dollar from around Bt35.3 at present.

HSBC quarterly report highlighted that global policy uncertainty would stay high after the United Kingdom voted to leave the European Union. Higher risks will weigh on growth via delayed investment and weaker employment. The western consumer still seems to be the only engine running at full throttle but for the consumer story to be sustainable once the oil boost fades, the gains will have to come from higher employment, stronger productivity and improved wage growth. Evidence of this is still scant and with inflation for now continuing to surprise on the downside, further stimulus is likely in some countries.

“The UK’s revolt against the status quo shows that populist opposition to established politicians and institutions is capable of executing significant change. So one of the implications of the Brexit vote is that markets, companies and consumers will likely attach a much higher degree of uncertainty to other looming political events, be it the Italian referendum on constitutional change in October or the US presidential election in November,” the report said.

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