BANGKOK: The World Bank has lowered its growth forecast this year for Thailand's gross domestic product (GDP) to 2.4%, marking a further reduction from April when the projection was cut to 2.8%.
The bank had projected Thailand’s GDP growth at 3.2% at the start of the year. In contrast, the global GDP growth forecast for the year has been raised to 2.6%.
The bank has also cut its forecast for Thailand in 2025 to 2.9%, down from the previous forecast of 3% made in April.
The economies of East Asia and the Pacific (EAP) are expected to grow by 4.8% this year, driven by an improvement in global trade, which positively impacts industrial activities and exports.
This growth helps to offset the slowing growth in China, with export-dependent countries like Thailand and Vietnam benefiting the most from these trends, the bank said.
Furthermore, the global tourism sector is continuing its recovery, particularly in the region which has reopened more slowly than other parts of the world, especially China. The report highlights that this will boost the export of services in certain countries, including Thailand and Cambodia.
Regarding monetary policy, the report said that while the region’s policies are expected to become more accommodating this year and in 2025, any interest rate cuts are likely to be limited. This caution is due to concerns about potential resurgence in inflation and the fact that large economies might continue their tight monetary policies.
The World Bank also noted that interest rates in some countries, particularly China and Thailand, are already lower compared to the United States. Thus, further rate cuts could lead to capital outflows and put additional pressure on the local currencies. - The Nation/ANN
