Spat, uncertainty slow Thai growth
Commerce Ministry to revise 2019 figures
Thailand's economic growth is expected to slow in 2019 because of rising global trade tensions and domestic political uncertainty, with local business operators suffering from negative momentum from the US-China dispute, says Deputy Prime Minister Somkid Jatusripitak.
Mr Somkid plans to meet with officials from the Commerce Ministry this month to revise the export growth target for 2019, likely to be downgraded from 8%.
The US-China trade dispute is affecting Thailand's trade-dependent economy, while a hazy domestic situation has kept investors away.
Thailand held a general election on March 24, but the next government has yet to form.
In 2018, GDP expanded by 4.1%, the fastest pace in six years. The Finance Ministry expects growth of 3.8% in 2019.
Mr Somkid said the government is concerned that the trade spat will lead to a global recession and a diplomatic brouhaha between the two countries.
"The government is closely monitoring the effect on business operators," he said. "We are worried about Thailand's exports because the sector contributes 70% to the country's GDP."
The automotive and electronics sectors, including related components, are core shipment segments.
But Mr Somkid said the government is still confident that the fundamentals of the economy are strong enough to expand and offset a bearish export situation.
Meanwhile, Thailand's political issue will see a clear conclusion to deliver more benefits to the economy, said the deputy prime minister.
"The new administration will be formed very soon to build up investors' confidence in the country," he said. "Investors should not be worried about Thailand's political situation because many political parties understand their concerns and all parties will take responsibility to push forward Thailand's economy."
Mr Somkid said the government will bring Chinese investors to visit the flagship Eastern Economic Corridor scheme and discuss plans to connect the EEC with China's Belt and Road Initiative in the future.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said business operators hope the political situation will clear up soon and boost confidence to invest in the country.
"Investors are waiting to see what will happen next after the election," he said.
The private sector recently revised down its GDP growth view for 2019 to 3.7-4% from the previous projection of 4-4.3%.
The country's export sector is seen expanding 3-5%, down from the previous projection of 5-7%, largely due to the trade war.
Mr Supant said the private sector will use the forum of the joint public-private sector consultative committee on May 22 to talk to the government about the overall economic situation and trade war.
Moreover, a human development plan will be put on the meeting agenda in order to support the EEC scheme.
"Thailand's industrial sector needs high-skilled workers for 12 targeted industries, which rely a great deal on innovation and technology, following the Thailand 4.0 initiative," Mr Supant said.