Bank of Thailand cuts economic growth forecast even further for 2013
With exports still falling and now domestic consumption being less than what the Thai government expected, yesterday the Bank of Thailand cut the economic growth forecast for 2013 to 3.7%. That fall is from the 4.2% forecast predicted in July.
The BoT has also drastically reduced the growth forecast for Thai exports from 4% in 2013 to just 1% as the European Union’s woes are not improving and America’s economy is also not on the upswing, as was originally predicted would happen.
Inflation in Thailand, however, has been revised downwards from an expected 2.3% to the current expectation of 2.2%, although that is expected to pick up again in 2014 as petroleum gas for both household and business use will rise in price. Not surprising really when Thais are either not spending, as they’re worried about the economy, or don’t have money to spend as they are already in so much debt.
What started out as a predicted economically stable 2013 for Thailand has not so far panned out that way. The economic growth forecast has been changing quite drastically over the last six months and, with only two months left before the end of the year, it’s looking like that isn’t going to improve.
2014 may not be any better for Thailand’s economic prospects either. That will be just a year before ASEAN goes into full swing in 2015, when markets across ASEAN will be opened up to anyone who is skilled. Some economists are predicting this could be disastrous for Thailand, as Thais are simply not prepared to compete with people from other ASEAN countries that will all of a sudden have access to the same opportunities Thais already have.
Throw in cheaper labor from most ASEAN countries than what Thailand can provide, and 2014 could be a bad year for Thailand.
Being the optimist I am, however, and knowing how Thailand actually seems to do better under adversity than when everything is moving along swimmingly, I’m still of the opinion that Thailand may just surprise the rest of the world once ASEAN kicks into high gear. They’ve done so before, and my gut feeling tells me they will do again.
2014, meanwhile, could be very interesting.