The Thai economy in 2019 will slow down from this year, with the US-Sino trade rift a drag, but growth of 4% is still possible, says Finance Minister Apisak Tantivorawong.
Even though Thailand will gain some benefits from trade protectionism of the economic giants, it will deal a blow to merchandise shipments, he said. The export tally depends on the global market, said Mr Apisak.
Thailand's GDP growth cooled to 3.3% year-on-year during the third quarter, down from 4.6% in the second quarter and 4.9% in the first quarter, the highest in five years. The slower growth was largely attributed to disappointing export and tourism figures.
For the first nine months, the economy grew by 4.3% over the same period last year.
Amid the cloudy global economic outlook, the Thai government has helped the domestic economy through a handout scheme to welfare smart cardholders and the elderly, while ramping up state investment in mega-infrastructure projects, aiming to provide a fiscal cushion next year.
Mr Apisak spoke at a seminar titled "The Thai economic direction in 2019" hosted by Chulalongkorn University Engineering Alumni, noting the global economy has already peaked and is starting a downward trend based on a 10-year global economic cycle.
The US-Sino trade tension should not end soon as the US has adopted trade protectionism, aimed at reducing China's clout. The 90-day tariff truce is a temporary halt, he said.
Hikes in interest rates across the globe is another threat to the Thai economy, said Mr Apisak.
Given Thailand's solid economic fundamentals, the country is among the last to raise its interest rate, which is still lower than that of the US, he said.
"The Fiscal Policy Office forecast the Thai economy will grow at around 4%-plus, but this isn't as rosy as expected because the global economy is dealing a blow to our economy. We must shift to rely more on the domestic economy, and local investors should invest more here," said Mr Apisak.
However, investors are wary of unrest following the general election, so they prefer holding off on investment, which is another risk, he said.
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