Thailand’s economic growth ‘hit speed bump’

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khao-sanMoody’s Analytics, the research department of the global rating agency, said in its newly published report on Thailand that the kingdom’s economy has “hit a major speed bump.”

The report says that growth in the second quarter of 2013 will just reach 4.1 per cent as compared to 5.3 per cent in the same quarter in 2012, a forecast based on an analysis of monthly household consumption, export and production data.”

Data shows that growth in exports, industrial production and domestic consumption is almost flat. But Moody’s prediction is still favourable given that local economists are only expecting 2.5 per cent growth due to lacklustre domestic demand and declining investment.

Thailand’s should pick up speed again when an improving global economy in 2014 lifts export industries, Moody’s reckons. However, the analysts said that a hard landing in the Chinese economy could shave 1.3 percentage points off of the GDP growth, with export industries bearing the brunt of the slowdown.

In early June, Moody’s Investor Service warned Thailand that accumulated losses from its rice pledging scheme could result in a credit rating downgrade as it increases the difficulty of the Thai government’s task of reaching its goal of a balanced budget by 2017. It has also put on review for downgrade the sub debt ratings of 3 Thai banks, Bangkok Bank, Kasikornbank and Siam Commercial Bank.

 

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Reading Time: 1 minute

Moody’s Analytics, the research department of the global rating agency, said in its newly published report on Thailand that the kingdom’s economy has “hit a major speed bump.”

Reading Time: 1 minute

khao-sanMoody’s Analytics, the research department of the global rating agency, said in its newly published report on Thailand that the kingdom’s economy has “hit a major speed bump.”

The report says that growth in the second quarter of 2013 will just reach 4.1 per cent as compared to 5.3 per cent in the same quarter in 2012, a forecast based on an analysis of monthly household consumption, export and production data.”

Data shows that growth in exports, industrial production and domestic consumption is almost flat. But Moody’s prediction is still favourable given that local economists are only expecting 2.5 per cent growth due to lacklustre domestic demand and declining investment.

Thailand’s should pick up speed again when an improving global economy in 2014 lifts export industries, Moody’s reckons. However, the analysts said that a hard landing in the Chinese economy could shave 1.3 percentage points off of the GDP growth, with export industries bearing the brunt of the slowdown.

In early June, Moody’s Investor Service warned Thailand that accumulated losses from its rice pledging scheme could result in a credit rating downgrade as it increases the difficulty of the Thai government’s task of reaching its goal of a balanced budget by 2017. It has also put on review for downgrade the sub debt ratings of 3 Thai banks, Bangkok Bank, Kasikornbank and Siam Commercial Bank.

 

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