Business group trims 2022 growth outlook over Ukraine war
published : 5 Apr 2022 at 14:49
updated: 5 Apr 2022 at 18:29
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%.