BANGKOK: The World Bank downgraded Thailand’s economic growth outlook for this year to 2.7 percent, but the latest revised figure is still higher than the bank’s growth estimate of 2.5 percent for last year.
A pickup in private consumption and investment due to the implementation of large public infrastructure projects will be the main economic growth driver for 2020, according to the World Bank’s Thailand Economic Monitor report released on Friday, report agencies.The global lender last October predicted that Thai economic growth would come in at 2.7 percent in 2019 and 2.9 percent in 2020. Its growth forecast for Thailand this year is slightly higher than the 2.8 percent predicted by the Bank of Thailand but below the 3.3 percent projection of the Finance Ministry’s Fiscal Policy Office.
Global economic growth is forecast to edge up to 2.5 percent in 2020 as investment and trade gradually recover from last year’s significant weakness even as downside risks persist, said Birgit Hansl, the World Bank’s country manager for Thailand.
The risks include a re-escalation of trade tensions and trade policy uncertainty, a sharper-than-expected downturn in major economies, and financial turmoil in emerging-market and developing economies.
“A continued deceleration of economic activity in large economies, China, the euro area and the United States, could have adverse repercussions across the East Asia region, through weaker demand for exports and the disruptions of global value chains,” Ms Hansl said, adding that financial investment, commodity and confidence channels could further weaken the global economy and hurt Thailand’s exports.
In 2019, declining exports and growing weaknesses in domestic demand weighed on Thai economic growth.
The baht, which has appreciated by 8.9 percent since last year, has also dealt a blow to international tourism and merchandise exports, the World Bank said.The government has responded swiftly to the growth slowdown, through accommodative monetary policies and a fiscal stimulus package to boost economic growth.