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Thailand lowers 2022 GDP outlook on Ukraine war, China slowdown

THAILAND’S main economic forecasting agency lowered its growth estimate for this year, and raised its inflation expectations, due to the impacts on the global economy from Russia’s war in Ukraine and a slowdown in China. 

The National Economic and Social Development Council (NESDC) said Tuesday (May 17) that it sees gross domestic product (GDP) expanding 2.5 per cent to 3.5 per cent, lowering its outlook range by a full percentage point from its previous estimate. 

“The big concern now is the conflict between Russia and Ukraine, which has a chain-reaction impact,” Danucha Pichayanan, NESDC secretary-general, said at a briefing. “The Covid outbreak situation in China is also another risk as it’s one of Thailand’s major export market.”

The slower full-year outlook contrasts with a better-than-expected performance last quarter, amid rising tourist arrivals and exports. GDP in the 3 months ended March advanced 2.2 per cent from a year ago, the NESDC said, faster than the 1.7 per cent median estimate in a Bloomberg survey and a 1.8 per cent expansion the previous quarter.

The baht extended its gain to 0.5 per cent against the dollar following the GDP data, according to data compiled by Bloomberg.

The growth figures come as the Bank of Thailand faces consumer prices that have accelerated faster than its 1-3 per cent target range since the beginning of this year. Central banks in Asia from India to Malaysia have begun moving away from their easy money policies as they prioritise fighting inflation over bolstering economic growth.  

The council raised its headline inflation forecast for this year to 4.2-5.2 per cent, from 1.5-2.5 per cent in February, while predicting a current account deficit of 1.5 per cent of GDP, flipping from an earlier-expected surplus of 1.5 per cent. 

It also reported that GDP in the first quarter rose 1.1 per cent from the previous 3 months, compared with growth of 0.9 per cent expected in the survey. BLOOMBERG