Modest recovery seen for Thailand’s economy – despite Brexit

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pattaya-floating-marketThailand’s economy seems to come back on its feet again after the World Bank raised the GDP growth forecast for the country in 2016 to 2.5 per cent from 2.2 per cent, believing Thailand’s strong fundamentals and ample fiscal and monetary buffers will help the Southeast Asian nation weather shocks despite the recent global economic turmoil caused by the Brexit vote.

However, the World Bank’s growth forecast is still below last year’s factual growth of 2.9 per cent.

The lender highlighted fiscal stimulus and tourism in Thailand as key drivers of economic growth, but noted that the economy still faces headwinds on the path to a broad-based and sustained recovery. The slowdown has exposed structural challenges in implementing public investment, maintaining or raising export competitiveness and addressing skill mismatches. The aging of the working population will begin to affect the Thai economy within the next five years.

The country’s own Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, in turn, initially put this year’s economic growth forecast at 3 per cent. However, the departure of Britain from the European Union, so it happens, is expected to indirectly affect Thailand, the center said, with potential to trim its economic growth by 0.1 percentage points. Thus, the forecast of the center was, as a precaution, reduced to 2.9 per cent, but is still 0.4 percentage points more than the World Bank’s.

The effects of a Brexit are seen in “vulnerable” Thai exports such processed chicken, automobiles, as well as gems and jewellery. Thai tourism destinations popular with Brits such as Phuket and Kho Samui may also welcome fewer UK travelers in the upcoming high season.

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Reading Time: 2 minutes

Thailand’s economy seems to come back on its feet again after the World Bank raised the GDP growth forecast for the country in 2016 to 2.5 per cent from 2.2 per cent, believing Thailand’s strong fundamentals and ample fiscal and monetary buffers will help the Southeast Asian nation weather shocks despite the recent global economic turmoil caused by the Brexit vote.

Reading Time: 2 minutes

pattaya-floating-marketThailand’s economy seems to come back on its feet again after the World Bank raised the GDP growth forecast for the country in 2016 to 2.5 per cent from 2.2 per cent, believing Thailand’s strong fundamentals and ample fiscal and monetary buffers will help the Southeast Asian nation weather shocks despite the recent global economic turmoil caused by the Brexit vote.

However, the World Bank’s growth forecast is still below last year’s factual growth of 2.9 per cent.

The lender highlighted fiscal stimulus and tourism in Thailand as key drivers of economic growth, but noted that the economy still faces headwinds on the path to a broad-based and sustained recovery. The slowdown has exposed structural challenges in implementing public investment, maintaining or raising export competitiveness and addressing skill mismatches. The aging of the working population will begin to affect the Thai economy within the next five years.

The country’s own Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, in turn, initially put this year’s economic growth forecast at 3 per cent. However, the departure of Britain from the European Union, so it happens, is expected to indirectly affect Thailand, the center said, with potential to trim its economic growth by 0.1 percentage points. Thus, the forecast of the center was, as a precaution, reduced to 2.9 per cent, but is still 0.4 percentage points more than the World Bank’s.

The effects of a Brexit are seen in “vulnerable” Thai exports such processed chicken, automobiles, as well as gems and jewellery. Thai tourism destinations popular with Brits such as Phuket and Kho Samui may also welcome fewer UK travelers in the upcoming high season.

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