Business group trims 2022 growth outlook over Ukraine war

Business group trims 2022 growth outlook over Ukraine war

A local resident sits near an apartment building damaged in the southern port city of Mariupol, Ukraine, on Monday. The Joint Standing Committee on Commerce, Industry and Banking revises down Thailand's economic growth forecast due to the Russian invasion of Ukraine. (Reuters photo)
A local resident sits near an apartment building damaged in the southern port city of Mariupol, Ukraine, on Monday. The Joint Standing Committee on Commerce, Industry and Banking revises down Thailand's economic growth forecast due to the Russian invasion of Ukraine. (Reuters photo)

Thailand's leading joint business group on Tuesday trimmed its economic growth forecast for this year due to the impact of the Russia-Ukraine war on global growth and energy prices.

The inflation forecast was raised to 3.5%-5.5% this year from a previous projection of 2.0%-3.0%, the Joint Standing Committee on Commerce, Industry and Banking, said in a statement. It maintained its export growth outlook of 3.0%-5.0% this year.

Inflation, which hit the highest level in 13 years in March, is weighing on a recovery in domestic demand and purchasing power, the group said.

Southeast Asia's second-largest economy grew 1.6% last year, among the lowest growth rates in the region.

On Tuesday, the World Bank also cut its economic growth forecast for Thailand to 2.9% this year from a previous forecast of 3.9%, with risks skewed to the downside.

The economy, however, can grow only 2.6% this year if the wider impact of the war is more severe and fiscal measures have less positive effects than expected, World Bank economist Warunthorn Puthong told a news conference.

Thailand's benchmark interest rate is expected to remain at a record low of 0.50% as the economic recovery is likely to be gradual with tourism still weak, she added.

The economy is projected to return to pre-pandemic levels by early 2023, when growth is expected at 4.3%, the World bank said.

On Tuesday, the Thai National Shippers' Council (TNSC) reported that the country's exports are expected to rise by 5% this year, compared with a previous forecast of 5% to 8% growth, due to uncertainty over the Russia-Ukraine war.

According to TNSC's forecast, exports would increase by 8% in the first quarter from a year earlier and by 2% to 4% in the second quarter. In the whole of 2021, exports jumped 17.1%.



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