BANGKOK(NNT) - The impact of the ongoing trade war between China and the United States on the Thai economy has become more apparent, with Bank of Ayudhya (BAY) downgrading the country’s economic growth outlook this year from 2.9% to 2.4%.
BAY chief economist Somprawin Manprasert said today Thai exports have been hit by the trade war as well as the slow disbursement of state funds. The export sector is expected to contract 2.5% this year.
As for next year, Mr. Somprawin said the bank has projected that the domestic economy will expand 2.5% due to growth in the tourism sector. Thailand is expected to welcome 11 million tourists from China in 2020 and 18 million in 2026. The disbursement of state funds in the first quarter of 2020 will help stimulate the economy, while the Bank of Thailand (BOT) is expected to cut its policy interest rate to 1%.
Although the central bank’s quantitative easing (QE) measures will support the export and business sectors, several external and internal factors, such as investment and consumer spending, have to be closely monitored. Meanwhile, the banking sector hopes the government will launch more measures to stimulate the Thai economy.