BANGKOK--Thailand's central bank is hopeful that the country's economy will return to normal in 2015 given the greater clarity in the political situation as a result of the May 22 coup.
The recovery in the export sector remains slow however and exports are unlikely to help boost growth soon. In its quarterly report on Friday, the Bank of Thailand said the 2014 GDP growth rate is estimated at 1.5%, down from the 2.7% projection it made in March, due to very sluggish growth earlier in the year.
"The larger-than-expected economic contraction in the first quarter of 2014 means less powerful push for Thailand's economy for the rest of this year," said Mathee Supapongse, a senior director at BOT.
"However, the turn of the political event on May 22 has led to more clarity in the government policy implementations and consequently resulted in a better growth outlook for the economy during the second half of this year and for next year."
Accordingly, the BOT has also raised its 2015 GDP growth forecast to 5.5% from the earlier projection of 4.8%.
The central bank is confident in what it described as the V-shape recovery of the economy during the next six months because of the resumption of state budget disbursement, the gradual return of private investment and the likely pickup in the tourism industry.
It expects though that export recovery will remain slow until next year due to a decline in demand from China, Japan and Asean and to falling agricultural product prices on the global market.
The bank has, therefore, lowered its export growth estimate to 3% from 4.5% for 2014 and to 6% from 6.5% for 2015.
Nevertheless, Mr. Mathee said that the central bank views the current monetary policy to be sufficiently relaxed to accommodate economic recovery, cementing its stance in the latest policy rate meeting by keeping the benchmark rate at 2% for the second time in a row.
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The recovery in the export sector remains slow however and exports are unlikely to help boost growth soon. In its quarterly report on Friday, the Bank of Thailand said the 2014 GDP growth rate is estimated at 1.5%, down from the 2.7% projection it made in March, due to very sluggish growth earlier in the year.
"The larger-than-expected economic contraction in the first quarter of 2014 means less powerful push for Thailand's economy for the rest of this year," said Mathee Supapongse, a senior director at BOT.
"However, the turn of the political event on May 22 has led to more clarity in the government policy implementations and consequently resulted in a better growth outlook for the economy during the second half of this year and for next year."
Accordingly, the BOT has also raised its 2015 GDP growth forecast to 5.5% from the earlier projection of 4.8%.
The central bank is confident in what it described as the V-shape recovery of the economy during the next six months because of the resumption of state budget disbursement, the gradual return of private investment and the likely pickup in the tourism industry.
It expects though that export recovery will remain slow until next year due to a decline in demand from China, Japan and Asean and to falling agricultural product prices on the global market.
The bank has, therefore, lowered its export growth estimate to 3% from 4.5% for 2014 and to 6% from 6.5% for 2015.
Nevertheless, Mr. Mathee said that the central bank views the current monetary policy to be sufficiently relaxed to accommodate economic recovery, cementing its stance in the latest policy rate meeting by keeping the benchmark rate at 2% for the second time in a row.
nasdaq.com
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