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Thai growth downgraded by Citibank
Citibank has downgraded its 2022 forecast for Thai economic growth to 3.5%, from 3.6%, with next year’s GDP predicted to expand by 4.5%, a fall from 4.8%.
Nalin Chutchotitham, investment adviser at Citi Thailand, said the downbeat estimates were due to an expected slowdown in government spending and global growth.
The bank also expects the Bank of Thailand’s Monetary Policy Committee to raise the policy rate three times, in increments of 0.25%, Ms Nalin added.
Citibank expects the MPC to raise the rate for the first time in the second half of this year, and then twice more in the first half of 2023.
Many economists believe the MPC will raise the benchmark policy rate by 25 basis points on Aug 10, and then raise it again twice more later this year.
The policy rate has been left unchanged at the current record low of 0.50% since May 2020. A rate hike will be aimed at taming the currently elevated rate of inflation.
There are three more MPC meetings this year, on Aug 10, Sept 28, and Nov 30.
According to Reuters, Thailand’s headline consumer price index (CPI) rose 7.61% in July, driven by high energy prices, and missed the Reuters poll forecast of 7.8%. The pace, though slightly lower than June’s 7.66% increase, was close to the highest level since 2008.
Citibank also expects rising numbers of foreign tourists in Thailand in both the second half of this year and in 2023, following the reopening of the country and its neighbours.
Earlier, Tourism and Sports Minister Phiphat Ratchakitprakarn said the ministry remained upbeat about its target of 10 million tourist arrivals this year.
Ken Peng, head of Asia-Pacific investment strategy at Citi Global Wealth, said that inflation will continue to be high in many countries in the second half of the year, while there will still be supply chain imbalances and stricter finance and banking policies in different countries. Oil price concerns will continue due to the ongoing war between Russia and Ukraine.
He added that global volatility will remain in place as the US faces an economic downturn due to ongoing inflation, unemployment, and wage increases.
Source: https://www.bangkokpost.com/business/2364964/thai-growth-downgraded-by-citibank