Growth outlook needs rejig

Growth outlook needs rejig

Inflation forces reworked forecast

Pedestrians walk past vendors along Chakkraphet Road in Phra Nakhon district, Bangkok. Private consumption is forecast to increase by 4.5% this year.  Apichart Jinakul
Pedestrians walk past vendors along Chakkraphet Road in Phra Nakhon district, Bangkok. Private consumption is forecast to increase by 4.5% this year.  Apichart Jinakul

The Finance Ministry plans to revise its 2022 forecast for Thai economic growth next month, focusing on the impact of rising inflation and spiking energy prices, says a ministry source who requested anonymity.

The ministry is worried the Russia-Ukraine war will affect its target for foreign tourist arrivals this year, the source said.

In January the ministry projected 2022 economic growth in the range of 3.5-4.5%, with average growth of 4%, based on the assumption of rising domestic spending following an improvement in the global pandemic situation.

That month the ministry also forecast a 4.5% expansion in private consumption for 2022 and the arrival of 7 million foreign tourists. Exports are expected to post growth of 3.6% based on recovering global demand.

Thailand's exports surged by 16.2% year-on-year in February, which was higher than expected, the commerce minister said on Thursday. Reuters said its own poll forecast a 10.2% rise in February, following January's 8% increase.

The ministry source said next month the global credit rating agency Moody's will assess the country's rating. The ministry is confident it can service state debt in the long run, although the government has borrowed heavily, to the tune of 1.5 trillion baht over the past two years.

The government collected net revenue of 911 billion baht during the first five months of fiscal 2022, surpassing the target by 46 billion baht.

Last year S&P Global Ratings maintained Thailand's sovereign credit rating at BBB+ and rates the country's economy as having a stable outlook.

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