Asia Briefing: Thailand lowers growth forecast

 

While there is little evidence of a slowdown on the streets of Bangkok, which are filled with gleaming new cars and showing signs of deepening prosperity, it’s been a week of reining in expectations about economic expansion in this southeast Asian economy.

Last week, the Bangkok government lowered its full-year growth forecast after the economy expanded less than had been expected in the first quarter, boosting the case for the central bank to cut interest rates. The overall picture remains fairly solid and there is still good news around.


Minimum wage
Prime Minister Yingluck Shinawatra’s administration has raised minimum wages and handed incentives to rice farmers and first-time car buyers to spur growth after the floods of 2011, and plans to spend 2 trillion baht (€51 billion) on high-speed rail links to major cities from Bangkok over the next seven years.

The ratings agency Fitch upped its assessment of Thailand in March, citing a resilient economy and a more stable political climate.

Despite the stronger baht, Thai exports managed to grow by 10.5 per cent year-on-year in April, driven by recovering shipments in the industrial sector. Demand from India and China is helping boost the export market.

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