GDP FORECAST | SootinClaimon.Com

THE UNIVERSITY of the Thai Chamber Commerce has raised its forecast for the Thai economy to 3.3 per cent for this year, thanks to the “yes” vote in Sunday’s nationwide referendum on the draft constitution and a stabilised political outlook.

Previously, the UTCC forecast that gross domestic product would grow by 3 per cent this year.

Next year, the UTCC expects GDP to grow by 3.5-4 per cent.

“The better outlook for the economy resulted from the positive outlook for political stability after the approval of the draft charter in Sunday’s referendum. Consumer confidence also increased in the latest survey,” said Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre.

He said that with the approval of the charter, about Bt50 billion was expected to injected into the economy from more spending and investment.

Other positive factors included the end of the drought, higher crop prices, expected government investment in the second half of this year, and better foreign-investor confidence.

However, worrying factors include continued export contraction and the low inflation rate. The UTCC now estimates that export value will shrink by 1.6-2.6 per cent this year, compared with a previous projection at 0.8-per-cent expansion. Inflation this year is projected at 0.2-0.6 per cent.

Saowanee Thairungroj, president of the university, said that according to a survey of 384 businesses, they believe that after the approval of the draft constitution, the economy will see stable growth into next year.

She said both Thai and foreign enterprises indicated that they would invest more in the next three to six months thanks to a positive attitude on political stability.

Most enterprises said they would expand their businesses over the next two years, while some would increase employment, seek more loans to increase liquidity, and expand their markets on expectations of better economic growth.

The survey asked businesspeople what they wanted the government to do to promote economic growth. Suggestions included reducing debt for low-income people, strengthening economic growth in rural areas, promoting small and medium-sized enterprises, eliminating corruption, and supporting business growth.

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http://www.nationmultimedia.com/business/UTCC-cuts-GDP-growth-forecast-to-2-5-3-5-30285820.html

GDP FORECAST

PETCHANET PRATRUANGKRAI
THE NATION May 13, 2016 1:00 am

GROSS domestic product could grow by as little as 2.5-3.5 per cent this year instead of the forecast 3.5-4.0 per cent, with the drought, high debt burden and sluggishness in the global economy and Thai exports hitting consumption, investment and domestic tourism, according to the University of the Thai Chamber of Commerce (UTCC).

Tris Rating also paints a weak picture for the Thai economy in 2016 with marginal growth of 2.7-3.0 per cent.

The major supportive factors are the effectiveness of government policies to stimulate domestic consumption, ability of the government to launch large infrastructure projects into real construction activities and recovery of agricultural-product prices.

The university’s Economic and Business Forecasting Centre also expects GDP to expand by only 2.9-3.9 per cent next year.

“The economy will grow slower than expected because of the serious impact from the drought hitting growth of the farming sector, and consumption.

“Thailand’s economy should show signs of recovery in the second half of this year,” Thanavath Phonvichai, director of the centre, said yesterday.

The centre’s study estimates that the economy will lose Bt540 billion from the drought and slowing export growth this year.

To strengthen economic growth, the government should accelerate its investment projects and budget disbursement for allocation to the local community, he said.

Only tourism will grow stronger this year. Other projects that could slightly help drive GDP growth are Pracha Rath (State of People), tax deductions for shoppers and the Village Fund scheme.

Expected income from tourism is Bt1.5 trillion this year, increasing from last year’s Bt1.4 trillion.

Agriculture hardest-hit

Agriculture is the sector that has been hardest hit, as farmers have low incomes and zero spending power amid the serious drought, he said.

Other factors damaging economic growth this year and next are low crop prices, slower expansion of the global economy and trading, slowing growth of China and problems in the fishery industry, which could see the European Union extending a yellow card to Thailand.

Thai export value is expected to grow by only 0.8 per cent this year, lower than the forecast of 3-per-cent expansion, on a weaker economic growth outlook for the world and China.

Imports will increase by only 0.7 per cent this year.

Inflation will rise 0.4 per cent, the centre predicts.

This year, consumption will edge up by 0.2 per cent instead of 3.2 per cent, investment by 4.3 per cent instead of 5.7 per cent, industry by 2.5 per cent instead of 3.1 per cent and farming by only 0.2 per cent instead of 3.2 per cent.

Watana Tiranuchit, president of Tris Rating, said the negative factors that are expected to continue in the rest of this year were the slow economic recovery of Thailand’s trading partners, particularly China, Asean and Japan; increasing trade sanctions from the US and Europe against agricultural exports from Thailand; and the effects of the drought and unfavourable weather conditions on crop products.

The banking system’s loan growth is expected to slow further in 2016. Profitability will be maintained or gradually decline.

With the sluggish economic conditions since 2013, high household debt and high corporate leverage have caused increasing levels of bad debt, and have limited banks’ profitability because of higher provisioning.

The first-quarter performance of listed banks has shown a continual decrease in profitability, Watana said.

Outstanding loans for the commercial banking system reported by the Bank of Thailand showed growth rates slowing from 11 per cent in 2013 to 5 per cent in 2014 and 4 per cent in 2015, she said.