The global economy is likely to slow down further in the second half of 2023, with the manufacturing sector continuing to contract. While the service sector began to see signs of slowing down in major economies including the US, Europe and Japan.
Resulting in the latest, the Joint Committee of the Private Sectors of 3 Institutes (KorKor.) has revised the direction of the Thai export sector for the year 2023 from the expected full year to be in a stable condition to negative 1% (as of May) to negative 1. -2% at the meeting of the Board of Directors in June
The global economy and the Chinese economy drag Thai exports.
Mr. Payong Srivanich, President of the Thai Bankers’ Association The chairman of the CRC meeting said that in addition, the global economic slowdown also came from the central banks of major western countries tending to continue raising interest rates in the second half of the year.
The tightening financial conditions caused by new credit strictures will further put pressure on the business sector and constrain spending. leading to a slowdown in the Chinese economy is likely to slow down as well China’s 2023 GDP growth forecast has been revised down to 5.4-5.5% from the previous 6%. These factors may drag the growth of the Thai export sector going forward.
“Exports tend to contract continuously. from the slowing global economy especially the west coast The government should accelerate exports to new markets. In countries that can still expand, such as China, India and countries in the Middle East to replace exports in the main country especially the weaker US and EU.”
The same applies to the baht depreciation issue. From the dollar that came back to appreciate after the Federal Reserve. It is likely to come back to raise interest rates two more times this year, which is more than the market expected. And Asian economies led by China are likely to slow down more than expected. As a result, the regional currencies are depreciating.
However, it is expected that the baht tends to depreciate temporarily and will gradually strengthen during the rest of the year. With the upward direction of Thai policy interest rates and easing domestic uncertainties,
The BOI maintains its GDP growth target of 3-3.5%.
As for the overall picture of the Thai economy, the CRC meeting expects that the Thai economy in 2023 will continue to grow by 3-3.5%, in accordance with the previously assessed framework, as the tourism sector continues to improve from foreign tourists, both in the expected number of tourists. to 29-30 million people and increasing per capita income
“The ACD sees the tourism market as the only main engine driving the country right now. Especially from Chinese tourists whose spending per capita has been increasing steadily, which the government should focus on accelerating efficiency. and speed in issuing passports And including taking care of the safety of tourists. While exports tend to slow down continuously ”
While inflation, the CRC views that although there is still a risk of drought (El Niño) and if wages are adjusted However, headline inflation is expected to be lower than the previous assessment in line with the direction of energy prices. which will be in the range of 2.2 to 2.7%
However, the CRC meeting was concerned about private consumption. That will be pressured by the cost of living and high household debt at 90.6% per GDP, which makes consumers more restrictive and cautious in spending.
hasten the establishment of the government find a way to solve household debt
which is what the new government wants to find ways with the private sector while the economy is not fully recovered The financial sector must continue to support vulnerable debtors. even though there is some cost per system It also includes the 30% group that is not in the system under the supervision of the BOT.
Finally, Mr. Kriengkrai Thiennukul, President of the Federation of Thai Industries (FTI), wants political stability as soon as possible. by accelerating the establishment of a government To be completed according to the timeline, that is, before the end of August, because it is seen that it will help accelerate the engine to drive the economy from government spending in another way.
“Accelerating spending and budgeting is urgent. The establishment of government quickly and smoothly is therefore extremely important. so that government spending is not interrupted will help support the economy to recover amid all-round risks, ”said Mr. Phayong.
