Bangkok Post

The bank’s senior economist, Lucksamon Atthapich, said on Wednesday the ADB also slashed its growth forecast for 2013 to 5% from the previous projection of 5.5%.

The ADB has also lowered its growth projection for developing countries in Asia to 6.1% from 6.9% and to 6.7% in 2013, down significantly from 7.2% in 2011, she added.

Ms Lucksamon said the ADB expected Thai exports to grow by only 5% this year, with a strong potential of further growth next year.

Thai export products that were down in the midst of a slump in global demand included electronics, electrical appliances, garments, natural rubber and rice, she said, adding that rice exports are unlikely to improve soon because the price of Thai rice was higher than its competitors.

The senior economist said domestic consumption would be boosted by the government’s policies for a 300 baht daily minimum wage nationwide early next year, the first-time car buyers scheme, the rice pledging scheme and the current low interest rate environment.

Private investment will also grow, particularly through flood prevention projects of the government and the private sector, she added.

The inflation pressure has also fallen in line with the slowdown in the economy. The ADB therefore lowered its inflation rate projection to 3% this year and 3.2% next year, she said.

Ms Lucksamon believed the central bank’s monetary policy committee would continue its easing policy due to the weaker than expected global economy and lower pressure from inflation.

She said the monetary policy panel would consider cutting the key policy rate, if necessary, to help spur the economy.

The senior economist also believed there would be no problem with the public debt, even though the government will have to acquire huge loans for financing various infrastructure development megaprojects.

She expected the public debt would be curbed below 50% of GDP over the next three years.

A major risk factor for the country’s economic expansion is the global fragile economy. If the economies of the  European Union and China were weaker than the previous projection, the Thai economy would be more affected, she said.

Oil price is another risk factor, said Ms Lucksamon. Thailand’s economic expansion could be derailed if global oil prices rise too high.