Thailand growth slowing on strong baht
Thailand’s export-oriented economy cooled down in the first quarter of 2013, mostly due to the strong currency, the baht, which is on the highest level against the US dollar since 1997 and has been still Asia’s best-performing currency so far in 2013.
The country’s GDP increased 5.3 per cent in the three months through March 2013 from a year earlier, after expanding a revised 19.1 per cent in the previous quarter, the National Economic and Social Development Board in Bangkok said on May 20. Earlier estimates by economists were around 6 per cent.
The baht’s appreciation has been hurting exports in the automotive, electronics and food sector, causing additional troubles for the latter through increasing rice prices.
There has been much discussion about a possible interest rate cut by Thailand’s central bank over the past weeks, but it is still unclear if the Bank of Thailand will go ahead and really cut the rate or at least implement capital controls to slow foreign currency inflows which are seen as the main reason for the strong baht.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has repeatedly said cutting the policy rate is his preferred choice. He made clear he wants to see the rate cut by as much as 75 basis points from the present 2.75 per cent, although the currency has eased somewhat over the recent past.
The bank’s Monetary Policy Committee is scheduled to meet on May 29.
Thailand's export-oriented economy cooled down in the first quarter of 2013, mostly due to the strong currency, the baht, which is on the highest level against the US dollar since 1997 and has been still Asia’s best-performing currency so far in 2013. The country's GDP increased 5.3 per cent in the three months through March 2013 from a year earlier, after expanding a revised 19.1 per cent in the previous quarter, the National Economic and Social Development Board in Bangkok said on May 20. Earlier estimates by economists were around 6 per cent. The baht's appreciation has been hurting exports...
Thailand’s export-oriented economy cooled down in the first quarter of 2013, mostly due to the strong currency, the baht, which is on the highest level against the US dollar since 1997 and has been still Asia’s best-performing currency so far in 2013.
The country’s GDP increased 5.3 per cent in the three months through March 2013 from a year earlier, after expanding a revised 19.1 per cent in the previous quarter, the National Economic and Social Development Board in Bangkok said on May 20. Earlier estimates by economists were around 6 per cent.
The baht’s appreciation has been hurting exports in the automotive, electronics and food sector, causing additional troubles for the latter through increasing rice prices.
There has been much discussion about a possible interest rate cut by Thailand’s central bank over the past weeks, but it is still unclear if the Bank of Thailand will go ahead and really cut the rate or at least implement capital controls to slow foreign currency inflows which are seen as the main reason for the strong baht.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has repeatedly said cutting the policy rate is his preferred choice. He made clear he wants to see the rate cut by as much as 75 basis points from the present 2.75 per cent, although the currency has eased somewhat over the recent past.
The bank’s Monetary Policy Committee is scheduled to meet on May 29.
