The Asian Development Bank (ADB) will revise down its GDP growth forecast for Thailand to lower than 2.9% this year following the country's slower-than-expected performance in the first half.
However, the new growth forecast, due to be announced on Sept 22, will be higher than 2.5%, said Luxamon Attapich, the bank's senior economist for Thailand.
The ADB's current estimate is 2.9-3%, in line with forecasts by Thai policymakers. The National Economic and Social Development Board estimates the economy will expand 2.7-3.2% this year, while the Bank of Thailand and the Fiscal Policy Office both put the figure at 3%.
GDP expanded at an annual rate of 2.9% in the first half, improving from 0.2% in the first half of 2014 and 1.6% in the second half of 2014.
The government's stimulus measures to help low-income earners in rural areas and small and medium enterprises will start giving a boost to GDP growth from the beginning of next year.
The Manila-based lender forecasts economic growth for 2016 of 4.1%, mainly underpinned by government investment as well as the stimulus measures. A global economic recovery led by advanced economies including the US, the euro-zone bloc and Japan will be positive factors for the Thai economy.
"Despite the improving world economy and the baht's depreciation, these will not support Thai exports significantly due to China's cooling economy, while Thai exports have high exposure to China," she said.
In the case of the US Federal Reserve's likely rate hike, it would affect foreign capital outflows from emerging markets including Thailand, but it would only be a short-term factor, given the country's strong fundamentals.
Thanavath Phonvichai, vice-president of the University of the Thai Chamber of Commerce's Economic and Business Forecasting Center, said the centre had marginally lowered its growth projection to 3.1% from 3.2% forecast in April.
The new figure is based on assumptions that exports will fall by 4.8% to US$217 billion and inflation will contract by 0.6%.
The impact of the stimulus packages will be seen in the final quarter, while the fourth-generation spectrum auctions and public investment will be the main engines driving growth to 3.9-4.5% next year, he said.
In another development, Kasikornbank (KBank) forecast that the baht will be continuously biased towards weakness, at 38 baht to the dollar at the end of next year, said Kobsidthi Silpachai, head of capital markets research.
The Fed rate hike and the yuan's further depreciation will be major drivers for the baht's pullback, he said.
The Fed is expected to increase its policy rate by three times during eight meetings over the next 12 months, he said, adding that KBank forecasts that the US central bank will jack up the rate by 25 basis points in the much-awaited meeting next week.
KBank estimates the yuan will fall by 4.4% against the dollar over the next 12 months.
The baht is the third-worst performer in Asia, plunging 9% this year, after the Malaysian ringgit's nearly 20% drop and the Indonesian rupiah's 13.2% decline. The Korean won lost 8.9% and the Singapore dollar tumbled 6.7% this year.
The baht's weakness will enhance the competitiveness of Thailand's tourism and export sectors.