Thailand
Thailand: CIMBT expects conflict to dent GDP growth prospects
The Thai economy is expected to continue to rebound in the second quarter amid inflationary pressure, but the growth rate for the full year will be lower than previously forecast because of the Russia-Ukraine war, says a CIMB Thai Bank (CIMBT) economist.
The bank forecasts Thailand’s GDP growth rate in the second quarter this year at 2.3% year-on-year and 0.8% quarter-on-quarter, accelerating from the first quarter despite many uncertainties, said Amonthep Chawla, head of the research office at CIMBT.
The war, which is pushing up the rate of inflation as well as energy and food prices, is the key risk factor for the Thai economy in the first half of 2022, said Mr Amonthep.
Given the Russia-Ukraine war, the price of Brent crude oil is expected to peak at US$120 per barrel in the second quarter this year before declining in the second half of the year. CIMBT forecasts an average oil price for the year of $100 per barrel.
The research office expects Thailand’s inflation rate to surge to almost 5% in the second quarter and remain at 4.5% for 2022.
He said inflationary pressure and the surge in fuel and food prices would affect the country’s domestic consumption and investment this year. Under this scenario, CIMBT downgraded its forecast for Thai GDP in 2022 to 3.1% from an earlier projection of 3.8%.
The number of international tourist arrivals in Thailand has been improving since the resumption of the Test & Go programme on Feb 1.
The government decided to scrap pre-travel RT-PCR tests for visitors coming into the country under the Test & Go, sandbox and quarantine schemes from April 1.
Mr Amonthep said the state’s additional easing of measures to attract foreign travellers as part of the country’s reopening will facilitate Thailand’s tourism rebound. However, the tourism sector is expected to gradually recover because of external risks and the travel limits imposed by other countries.
The number of inbound foreign travellers is not expected to exceed 500,000 in the second quarter this year due mainly to external factors, he said.
The second quarter is not high season for Western tourists, while China has yet to allow its citizens to resume overseas travel. In addition, the depreciation of the ruble could dampen demand among Russians.
Source: https://www.bangkokpost.com/business/2292046/cimbt-expects-conflict-to-dent-gdp-growth-prospects