A corner of Bangkok, Thailand(Photo: thainews.prd.go.th)
Bangkok (VNA) – Thailand’s GDP growth forecast for 2020 has been set at 2.5-3 percent by Kasikorn Research Centre (K-Research) as compared to 2.8 percent growth seen this year.
According to K-Research, the country needs additional stimulus to meet the upper edge of the estimated range. The 2020 economic outlook will likely suffer from external risk factors, particularly the US-China trade war and further dampening of exports.
Amid this gloomy sentiment, the research house predicts Thailand's exports to contract 2 percent next year, said assistant managing director Nattaporn Triratanasirikul, adding fiscal policy should be the key instrument to support economic momentum while global uncertainties remain.
Additional stimulus packages would help the economy to grow by 3 percent next year. Otherwise it would be below 3 percent. Otherwise, it would be below 3 percent, she said.
Measures should be targeted towards small and medium-sized enterprises that are affected by the trade war, especially those reliant on exports, she said. These industries could see a higher lay-off rate, which was 4.5 percent in July, up from 2.8 percent in April and 1.9 percent in January.
Nattaporn suggested the government should resume its soft-loan schemes for SMEs in order to ease the financial burden of this business segment and slow down staff lay-offs.
K-Research slashed its 2019 GDP growth forecast from an earlier projection of 3.1 percent to 2.8 percent because the US-China trade dispute intensified. The research house also cut its export growth outlook from zero to a 1 percent contraction for this year after shipments shrank 2.2 percent year-on-year in the first eight months.
The Thai baht is expected to remain firm until the first quarter of next year under a short-term assumption. K-Research estimates that the US Federal Reserve and the Bank of Thailand (BoT) will each cut the policy rate one more time this year and once more next year, with Thailand's rate falling from current 1.5 percent to 1 percent in 2020.
BoT Governor Veerathai Santiprabhob said the economic growth forecast of 2.8 percent for 2019 is below potential, and monetary policy will be reviewed if conditions worsen.
Last week, the BOT's monetary policy committee (MPC) left the benchmark policy rate unchanged at 1.5 percent, after August's surprise cut, the first easing since 2015. The MPC will next review monetary policy on November 6./.
VNA
