BANGKOK: Slower economic recovery and shrinking exports are the main reasons quoted by the BoT for the lower adjustment, as well as the impact of the drought that could be more severe than expected.
Bank of Thailand (BOT) assistant governor for monetary policy group Jaturong Jantarangs, also secretary to the bank’s monetary policy committee, said that the committee has adjusted its forecast for the economy this year down from 3.5 % to 3.1 % since it views that the economic recovery has been slower than expected.
The Thai economy continued to recover gradually supported by fiscal spending, tourism, especially in major cities which saw a broad-based increase in foreign visitors, and a pickup in private investment in some business sectors, in particular those benefiting from government policies such as alternative energy and telecommunications.
However, the overall economic momentum slowed down, following dissipation of the temporary boost from the government’s tax rebate measure around the end of last year and from the accelerated car purchases prior to the increase in vehicle excise tax this year. The committee has also cut its forecast for the export this year from 0 % to a 2 % contraction. With regard to the balance of risks to global growth, the Committee judged it tilted more to the downside owing mainly to fragility of the European financial sector.
