English
Thailand: World Bank maintains 3.2% GDP growth forecast
The World Bank is maintaining its Thai GDP growth projection of 3.2% for 2017, citing recovering commodity prices, improving confidence and accommodative policies.
The overall global economy is forecast to grow by 2.7%, up slightly from 2016. The World Bank’s projection of global economic growth assumes that recovering oil and commodity prices will ease pressure on emerging-market commodity exporters. Growth in advanced economies is expected to edge up to 1.8% in 2017, with fiscal stimulus in major economies such as the US generating faster domestic and global growth.
Rising trade protectionism, however, could have detrimental effects. “Because of the outsize role the US plays in the world economy, changes in policy direction may have global ripple effects,” said Ayhan Kose, director of the World Bank’s development prospects group. “More expansionary US fiscal policies could lead to stronger growth in the US and abroad over the near-term, but changes to trade or other policies could offset those gains.” East Asia and the Pacific region are expected to ease to 6.2% growth from 6.3% in line with a slowing China.
Although Thailand is expected to hold steady, regional growth ex China is projected to advance at a more rapid rate of 5% this year, said the World Bank.
Growth for some economies in the region is forecast to speed up, with Vietnam expected to accelerate to 6.3% from 6% last year as demand is supported by strong foreign direct investment and manufacturing exports. The Philippines is also expected to maintain growth of around 6.9% from 2017 to 2018 on the back of infrastructure investment and strong consumption, with additional revenue support from service exports.
Growth in Indonesia is anticipated to pick up to 5.3% from 5.1%, thanks to a rise in private investment. Malaysian growth is expected to increase to 4.3% as adjustments to lower energy prices ease and commodity prices stabilise. Growth of the largest economy in the region, China, has been moderated from a projected 6.7% in 2016 to 6.5% this year.
It said China’s policy-supported infrastructure investment has partly offset a decline in private investment, while the service sector has overtaken industry as a driver of growth. Financial markets have remained stable since February last year, while capital outflows have eased but remained sizable.
The World Bank said growth in the region was close to its long-term average as robust domestic conditions countered weaker external demand. Their low and declining inflation enabled central banks in the region to maintain accommodative monetary policies unchanged from last year.
It said an unexpected deceleration of major economies and weaker-than-expected global trade dampening growth in the region counted as major downside risks which first arose in mid-2016, while a rise in support for trade protection and a faster-than-expected slowdown of China would stabilise regional spillovers.
Similarly, an adverse reaction to the US Federal Reserve’s anticipated rise in interest rates with greater increases in global risk aversion could slow growth even further.
It said the rising trend of the Fed rate has put more pressure on countries in the region such as Malaysia and Indonesia due to their sizeable foreign-currency-denominated short-term debt, while the degree of pressure is less in Thailand.
Source: http://www.bangkokpost.com/business/news/1178489/world-bank-maintains-3-2-gdp-growth-forecast