New Bank of Thailand governor Veerathai Santiprabhob held
his first press conference Wednesday, and warned of even
greater downside risk for 2016 than at present.
(Photo by Seksan Rojjanametakun)
The country faces the threat of increased downside risks to
its economic growth next year, says the Bank of Thailand's chief.
The warning comes despite the central bank's
projection of
3.7% GDP growth next year
and its hopes for multiplier
effects from large-scale infrastructure projects.
Monetary policy remains sufficiently
accommodative, according
to central bank governor Veerathai Santiprabhob, who said
Wednesday that fiscal policy should play the main role in
gathering momentum
for the economic recovery.
"Our latest forecast has indicated
greater downside risks
[for next year's economic growth outlook], so we've
already
communicated about those risks [publicly]," he said in his first
press briefing after taking office this month.
"There are two more rounds of meetings
[for the central
bank's Monetary Policy Committee (MPC)], and we'll assess
related factors continuously.
" Factors contributing to next year's
growth forecast include
public investment in megaprojects, multiplier effects
from
private investment stemming from government expenditure,
an
export recovery to the US market, tourism expansion and
a low-base effect from
this year's GDP growth,
Mr Veerathai said.
Next
year's GDP growth forecast of 3.7% was revised down
from an earlier 4.1%. The
central bank expects Thai exports
will expand by a mere 1.2%, down from a
previous
projection of 2.5%.
The World Bank has painted a gloomy picture
of the Thai
economy in 2016, cutting its GDP growth forecast to 2%
from 4%.
If
its view holds, Thailand's economy will continue to be the
slowest among Asean
peers.
While Mr Veerathai reiterated the central
bank's core mandate
was to manage financial stability in both the medium and
long
terms, he said there were channels for monetary easing when
financial
conditions are stable, as reflected by consecutive rate
cuts by the MPC in
March and April.
This does not, however, mean the central
bank will implement
further monetary stimulus measures, he said, adding that
the
central bank would play a "supporting role".
Supply-side
policies such as infrastructure spending,
improvement in labour productivity
and boosting private
investment are deemed proper for addressing Thailand's
economic structural problems and enhancing the country's
country's growth prospects
in the coming periods,
Mr Veerathai said.
"Encouraging investment is a crucial
move, as investment in
the country has receded, while the government's
infrastructure
investment projects and state policies
supporting private
investment are the right moves to upgrade Thailand's
economy,"
he said.
Regarding China's economic growth outlook in 2016,
Mr
Veerathai said the consensus was the Chinese economic
slowdown would continue
next year as authorities rebalanced
the economic model towards domestic
consumption.
However, a hard-landing scenario in China is
not expected,
he added. Meanwhile, the Fiscal Policy Office forecasts
Thai
economic growth of 3.2% next year, underpinned by
accelerated public
investment, director-general Krisada
Chinavicharana said.
He
said next year's growth prospects looked better than this
year's, with
investment budget disbursement the main
driving force for the economy.
State
agencies took out 6 billion baht from the investment
budget in the second quarter of fiscal 2015, ramping
up to
8 billion in the third quarter and 10 billion baht in the first
two
months of the fourth quarter, which ended on Sept 30.
For fiscal 2016, the government is
allocating 543 billion baht
for the investment budget, representing 20% of
annual
expenditure, up from 17.5% in fiscal 2015.
Moreover, some of the fiscal-2015 investment
budget has
been carried over into this year.
Mr
Krisada said domestic consumption showed positive
signs last month.
Value-added tax receipts, a proxy for domestic
consumption,
grew by 11% year-on-year after an 8.5% decline in August.
For exports,
the main headwind next year will be China's
bleak economic outlook, Mr Krisada
said.
Business : Business News,Bangkok Post,22 October 2015.
As the world economic still fragile including Chinese
economic slowdown also predict so Thai investor and
business sector should make plan for the company to
match with the
situation to be survived.
Sincerely Yours.
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