Thailand
Thailand, K-Research: GDP to grow 3.4%
Kasikorn Research Center (K-Research) expects economic growth to hit 3.4% this year, an improved outlook based on signs that exports and domestic consumption have increased.
The research house raised its estimate for the first half to 3.3% from 3.1% due to higher-than-expected export growth in the first five months, said head of research Nattaporn Triratanasirikul.
K-Research projected earlier that GDP will reach 3.3% in 2017.
Its latest forecast of economic growth falls just shy of the Bank of Thailand’s 3.5% and the Fiscal Policy Office’s (FPO) 3.6% estimate.
K-Research expects higher export growth this year of 3.8%, up from its earlier prediction of 2%, due to the economic rebound seen in major economies around the world, Ms Nattaporn said.
But growth in outbound shipments is likely to slow from now until December due to weaker commodity prices led by oil, she noted.
Exports in May jumped 13.2% year-on-year to UScopy9.9 billion (676 billion), the highest in more than four years, as the global economic recovery helped boost demand and shrug off the impact of the baht’s appreciation.
For the first five months of 2017, exports rose 7.2% to $93.26 billion, while imports were up 15.2% to $88.21 billion, yielding a trade surplus of $5.05 billion for the period.
She forecast the baht will depreciate to 34.50 to the dollar by the end of year, due largely to a stronger greenback from interest rate hikes by the US Federal Reserve.
Meanwhile, domestic consumption is expected to rise 2.7% instead of 2.2% based on the assumption that new car sales will show double-digit growth, the research house said.
K-Research maintained the growth estimate for government investment at 3.2%, but was less optimistic about private investment, which is has been tipped to grow just 0.5%, instead of 1.5% previously predicted.
K-Research also cut its inflation forecast to 0.8% from 1.5% due to changing oil prices.
As it expects the controversial new labour law will not be enforced until January, the research house said this should only have a limited impact on the country’s GDP growth for 2017.
With illegal migrant workers believed to number in the low millions, K-Research said the new law is likely to cost the country 0.2-0.3% of GDP, or between 28.4 billion and 46.50 billion baht.
Migrant workers in the farming, hospitality, trading and construction sectors account for 65% of all foreign labourers in Thailand, statistics show. There are about 1.5 million foreigners legally working in the country.
Turning to the banking industry, researcher Kangana Chockpisansin said non-performing loans (NPLs) will keep rising and peak at 3.07% of outstanding loans in the third quarter.
The spike in bad debt will come from retail finance, mortgages and SMEs, she said.
“We think banks will need to restructure their bad loans significantly for the rest of the year to keep the NPL ratio at around 3%,” she said.
About 70 billion baht of debt is expected to be restructured each quarter, up from 50-60 billion baht in recent quarters, she added.
Source: http://www.bangkokpost.com/business/news/1282447/k-research-gdp-to-grow-3-4-