Bangkok Bank (BBL) has voiced concerns that sluggish private consumption could lower the country's GDP growth to below 4% next year.
Challenges include weak crop prices, which hurt low-income earners' purchasing power, sagging domestic consumption and the country's economic growth, said executive chairman Daja Tulananda.
BBL, the country's largest lender by assets, forecasts Thailand's 2019 GDP growth at 4%, assuming that economic momentum will continue and domestic demand, consisting of public and private investment and domestic consumption, will be the main growth driver.
"To achieve 4% economic growth, domestic consumption and investment for next year should be better than this year, as external demand is losing steam," Mr Daja said. "Otherwise, growth could slip below 4% next year."
Both policymakers and private research houses believe that the global economic slowdown and the US-China trade spat will cool economic growth in 2019, but most are still optimistic that the pace will not drop below 4%.
The central bank forecasts GDP growth of 4.4% this year and 4.2% in 2019, but an economic forecast review is scheduled at this year's final meeting of the Monetary Policy Committee (MPC) on Dec 19, while the Finance Ministry's Fiscal Policy Office predicts growth of 4% next year.
CIMB Thai Bank (CIMBT) earlier this week projected economic growth to slow to 3.7% next year.
Virasak Suthanthavibul, senior executive vice-president, said risk to the bank's growth forecast skews to the downside because the trade dispute between the US and China poses a greater challenge to the economy than when the forecast was first made.
The negative factor could take a toll on small and medium-sized enterprise (SME) exporters, and the risk will linger into next year.
The bank expects 2018 SME loan growth of 3-5% after SME loan demand improved significantly in the final quarter of the year, mainly due to seasonal factors. The bank has also set an SME loan growth target for next year at the same rate as this year.
Amid greater global economic uncertainty, especially the trade war issue, the bank will tighten SME loan scrutiny and asset quality because some SME businesses face greater challenges despite improving economic momentum.
SMEs in the service sector and those engaged in trade are expected to remain solid next year, Mr Virasak said.
He said the bank will monitor risky customers in order to control asset quality.
BBL stands ready to provide client assistance to prevent non-performing loans (NPLs) in the business segment from spiking.
For the first 10 months of the year, BBL's loans outstanding rose by 1.9% from the end of last year to 1.85 trillion baht. As of September, the bank's total NPLs made up 3.6% of outstanding loans, down from 3.8% at the end of last year.