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Thailand: BoT sees glimmer in final quarter
The Bank of Thailand is optimistic that the country’s economic growth momentum in the final quarter is gathering pace, propelled by private consumption amid a raft of stimulus packages, public and private investment, and tourism strength.
State investment in big-ticket infrastructure projects and the Eastern Economic Corridor (EEC) is expected to “crowd in” private investment this quarter, said Don Nakornthab, senior director of the monetary policy group at the central bank.
Should private investment fail to reverse course, it would pose a risk to the Thai economy, he said.
The tourism sector will continue to be a major contributor to economic growth in the last quarter, Mr Don said.
Economic growth in the third quarter is estimated to fare better than in the second quarter but still be softer than anticipated, largely weighed down by the faltering global economy and the Sino-US trade spat, he said.
“We expect third-quarter GDP growth of 2.9%, better than 2.3% in the second quarter, but still weaker than expected,” Mr Don said.
The central bank’s projection for third-quarter economic growth is in line with the Fiscal Policy Office’s recent projection of 2.9%.
The Finance Ministry’s think tank also forecast second-half growth outpacing that of the first, though it downgraded the annual economic outlook to 2.8% from 3%.
Thailand’s economy grew at the slowest pace in almost five years in the second quarter as exports and tourism deteriorated, buffeted by US-China trade tensions and the strong baht. GDP rose 2.3% from a year earlier, down from 2.8% in the first quarter.
The country’s economy in September continued to decelerate, dragged down by the export slump, economic sluggishness among trading partners and a deterioration in manufacturing production and private investment, Mr Don said.
Payment-based merchandise exports in September fell 1.5% from the same period of last year. Outbound shipments will mark the 11th straight monthly contraction at 3.3% if gold is stripped out.
Private consumption in September moderately expanded by 1.3%, compared with 1% growth in the previous month, but was still lower than the second quarter’s.
Mr Don said consumer confidence and the employment rate remain worrisome.
The consumer confidence index has declined for seven straight months, and the number of non-farm workers has continuously decreased in all sectors.
Although September’s unemployment rate remained stable from the previous month, the number of workers below age 60 who prematurely retired rose, Mr Don said.
He did not comment as to whether the US Federal Reserve’s latest 25-basis-point rate cut would have any impact on offshore fund inflows, as Bank of Thailand officials are observing a blackout period before the Monetary Policy Committee’s meeting scheduled for next Wednesday.
He said only that the Fed’s action was in line with expectations.
Source: https://www.bangkokpost.com/business/1784244/bot-sees-glimmer-in-final-quarter