Thai Finance Ministry Lowers Economic Growth, Export Forecasts

(Bloomberg) --

Thailand’s Finance Ministry cut its economic growth and export forecasts as the U.S.-China trade war and baht strength take their toll.

Gross domestic product is set to climb 3% in 2019, less than the previous expectation of 3.8%, projections released Tuesday showed. The latest estimate suggests Thailand is on course for the weakest annual expansion since 2014.

“Cooling global demand amid trade tension has affected Thai growth,” Lavaron Sangsnit, the head of the ministry’s Fiscal Policy Office, said in a briefing in Bangkok.

2019 Predictions

The baht is expected to average 31.5 to the dollar, a stronger outlook than in the last estimates in April. Its appreciation of more than 7% in the past year leads a basket of emerging-market currencies tracked by Bloomberg.

Thailand’s Cabinet on Tuesday approved economic stimulus steps worth almost 317 billion baht ($10.3 billion). The package of government spending and loans, first unveiled Aug. 16, aims to counter a slowdown and achieve at least 3% expansion this year.

Lavaron said GDP could climb as much as 3.5% if the stimulus plan works well.

The Bank of Thailand unexpectedly lowered borrowing costs earlier this month, but risks from elevated household debt limit its scope for aggressive monetary easing.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net, Michael S. Arnold

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