BANGKOK: The International Monetary Fund (IMF) lowered its forecast for Thailand's economic growth to 3.5 percent in 2015, and 0.5 percent in 2014, amid concerns over political stability, weak exports and slow domestic consumption.
The country has room to ease monetary policy further if growth disappoints, the IMF said in a statement on Wednesday.
"While the current monetary stance is accommodative, there is scope to consider a further easing of the policy stance if the economic recovery is weaker than anticipated," it said.
Thailand's policy rate has stood at 2 percent since March, when it was cut by 25 basis points to help business during rising political tension that led to an army coup in May.
The country's military government has struggled to revive growth in Southeast Asia's second-largest economy since the coup that ended prolonged political unrest that hurt tourism, investment and consumption.
The IMF's latest forecast is below the Thai central bank's expectation for 4.0 percent growth this year, and marks a downward revision from its previous forecast in October for 1.0 percent growth in 2014 and 4.6 percent growth in 2015.
Thailand's economy grew only 0.2 percent in the first nine months of 2014, and the central bank sees growth of 0.8 percent for the full year. Official data will be released on Feb. 16.
The IMF said the fall in world oil prices should help fuel a recovery in consumption in 2015, and private investment should also recover after the authorities approved a backlog of projects that built up when the previous civilian government was paralysed by protests.
"Risks to the outlook are tilted to the downside. Domestic risks to the economy come from policy slippages, weaker-than-expected private demand and political uncertainty," it said, noting external risks including global financial volatility and protracted slow growth in advanced and emerging economies.
With consumer prices falling and economic growth sluggish, some analysts expect the central bank to cut its policy rate again when it next meets on March 11.
However, the Bank of Thailand (BOT) said on Tuesday it had no plans to adjust monetary policy despite the first annual decline in consumer prices in more than five years in January.
Deflation has led to monetary easing elsewhere in the world, but the BOT held its interest rate last week.
Comments
Comments are closed.