World Bank cuts Thailand growth to 2.5%

[buksida]

The World Bank has slashed Thailand's economic growth this year to 2.5% from 3.5%, the lowest in the East Asia and Pacific region, in its latest regional report released on Monday.

Thailand's growth next year was also cut to 2% from 4% in the previous forecast in April.

The bank also trimmed the 2015 and 2016 growth forecasts for the region, citing the risk of a sharp slowdown in China and possible spillovers from expected increases in US interest rates, in its East Asia Pacific Economic Update.

In the case of Thailand, the bank said household consumption and private investment should recover only modestly from last year while public spending will contribute to almost half of growth this year.

"Tourist receipts were expected to record healthy growth, in a context of enhanced political stability, although prospects may be hampered by the attack on the Erawan Shrine in August," it said in the report.

Exports of goods will remain subdued, growing by less than 1% in dollar terms as key export prices fall and demand from China and Asean weaken, it said.

Imports of goods will continue to contract as prices of fuel imports, around a fifth of total imports, remain low.

"Capital flows will continue to be volatile, with a risk of experiencing potentially larger outflows should there be an increase in interest rates in the US."

The main challenges for Thailand continue to be the uncertain global environment affecting Thai exports, and internal stability.

"In the case of a sharper than expected slowdown of the Chinese economy, accompanied by global financial volatility, Thailand would be mostly affected through the trade and expectations channel [China represents 12% of total exports and 8% of total FDI inflows], which would hamper economic recovery.

"Nonetheless, authorities still have monetary and fiscal space to react to these eventualities," it said.

The bank noted inequality remains a major challenge in Thailand, differentiating the country regionally and across rural and urban areas.

Full Story: Bangkok Post

[Spitfire]

Hopefully the baht will devalue further to where it should be. They have kind of got the message a bit (and have devalued it a bit) but not way enough yet to reflect reality.

I think I read a report that Thailand has the worst performing economy in Asia at the minute. Really the baht should be 60-65 to a UK pound, 50-52ish for a Euro and around 40-45 for a US$ to make everything swell export and tourism wise.

Thailand is not at the stage where a high value home currency is helpful to their economy as they are a long way off that.

[lomuamart]

The reason that the GBP is not "as good as it could be" is because it's losing ground on the USD. Nothing much to do with THB.
I love the last para of the OP re inequality. State the obvious and neither suggest any alternative nor -well anything really.