Domestic consumption, private investment and fiscal-budget disbursement could compensate for lacklustre export growth, says the Bank of Thailand.
Mathee Supapongse, assistant governor of the monetary policy group, said domestic demand for non-durable goods, private investment and budget disbursement for fiscal 2015 starting Oct 1 could entirely offset ebbing export growth if that growth came in at 2% this year.
The outlook is not expected to become much worse since the figure for the first seven months of this year is already relatively low, he said. Exports edged down 0.42% year-on-year in the January-July period to US$132 billion.
The central bank expects full-year export growth to miss its latest official forecast of 3% due to China's economic slowdown and Japan's consumption tax hike.
The Thai National Shippers' Council also slashed its export growth forecast to less than 1% as the sector navigates risks from the still-fragile global economy, disease outbreaks and escalating cyberattacks.
The central bank's Monetary Policy Committee will assess this year's export growth prospects based on figures for the first seven months, the outlook for each product and the progress of economic recovery among Thailand's trading partners, said Mr Mathee.
The rate-setting panel's next call is slated for Sept 17.
The US economy remains on the path to recovery, but the Chinese and other Asian economies have not recovered rapidly, said Mr Mathee.
He said Japan's recovery prospects were already seen as dismal, while Europe's recovery had been weak.
An export slump would affect the Thai economy to some extent, but Thailand also relies on imports for economic growth, Mr Mathee added.