Forecasts for Thai GDP down to 2.5% as economy slows down

Third quarter growth slowed to 0.1% QoQ.

Growth in Thailand continues to stagnate as HSBC lowers its 2019 forecast to 2.5% from 3.1%, and 2.7% from 2.8% for 2020.

Third quarter growth slugged 0.1% QoQ sa, said economist Noelan Arbis.“The Bank of Thailand’s (BoT) has limited room or inclination to ease interest rates further, while fiscal authorities are depending on state-owned enterprises (SOEs) and private-public partnerships (PPPs) to provide the additional ‘fiscal’ boost the economy needs,” he explained.

HSBC believes that a more efficient investment process, not stimulus, is what Thailand needs to stimulate growth. “We believe fiscal policy will have to pave the way for faster investment growth, and a shift away from PPPs will be a good first step.”

Moving away from PPPs would also reduce the country’s re-widening current account surplus, which has been the reason for the baht’s recent performance compared with its regional peers.

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