Thailand’s major business group on Tuesday cut its economic growth forecast for this year to 2.5%-4.0% from a previous forecast of 2.5%-4.5% due to the impact of the Russian-Ukrainian war on global growth and energy prices.
The inflation forecast has been raised to 3.5%-5.5% this year from a previous projection of 2.0%-3.0%, according to the Joint Standing Committee on Commerce, Industry and Banking .
The group said in a statement that it maintained its outlook for export growth of 3.0% to 5.0% this year.
Inflation, which hit a 13-year high in March, is weighing on the recovery of domestic demand and purchasing power, the group said.
Southeast Asia’s second-largest economy grew 1.6% last year, one of the slowest growth rates in the region.
On Tuesday, the World Bank also lowered its economic growth forecast for Thailand to 2.9% this year from a previous forecast of 3.9%, with risks skewed to the downside.
The economy, however, can only grow by 2.6% this year if the wider impact of the war is more severe and if fiscal measures have less positive effects than expected, said the Bank’s economist world Warunthorn Puthong during a press conference.
Thailand’s benchmark interest rate is expected to remain at a record high of 0.50% as the economic recovery is expected to be gradual with tourism still weak, she added.
The economy is expected to return to pre-pandemic levels by early 2023, when growth is expected to reach 4.3%, the World Bank said.
- Reuters, with additional editing by George Russell