Thailand’s growth in 2019 likely to ease; central bank leaves key rate unchanged

09-Feb-2019 Intellasia | Business Times | 6:00 AM Print This Post

Thailand’s economic growth in the fourth quarter of 2018 is likely to pick up from Q3, as stronger net trade balance and tourism offset a slight ease in domestic demand, according to Maybank Kim Eng economists Lee Ju Ye and Chua Hak Bin.

The economists projected that Thailand’s gross domestic product growth for Q4 is likely to come in at 3.5 per cent, outpacing the 3.3 per cent growth in Q3. Thailand will release its Q4 GDP growth numbers on 18 February

For 2019, growth is forecasted to slow slightly to 3.8 per cent compared to 4.1 per cent in 2018, on the back of a clouded outlook from the US-China trade war and potential weakening in China tourist levels.

The Maybank Kim Eng economists also revised Thailand’s headline inflation forecast to 1.1 per cent this year, based on oil prices averaging $65/barrel. This is a slight uptick compared to 2018′s inflation of 1 per cent and remains at the lower end of the Bank of Thailand’s target range of 1 to 4 per cent.

On Wednesday, Thailand’s central bank left its benchmark interest rate unchanged as expected by economists, as subdued inflation and a rapidly strengthening baht led policymakers to hold the rate at 1.75 per cent after the first hike in seven years in December 2018.

“The committee viewed that accommodative monetary policy would remain appropriate in the period ahead,” said the Bank of Thailand.

Maybank Kim Eng economists expect another hike of 25 basis points in the third quarter of 2019, when the Fed is likely to resume its gradual tightening cycle. Maybank Kim Eng’s FX team is also forecasting USD/THB to end 2019 at around 32.

ING Asia Pacific economists expect the central bank to leave policy on hold throughout 2019, but said that they are reviewing their call of USD/THB rising to 33 on “rising political risks”.

https://www.businesstimes.com.sg/asean-business/thailand percentE2 percent80 percent99s-growth-in-2019-likely-to-ease-central-bank-leaves-key-rate-unchanged

 


Category: Thailand

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