Thailand cuts growth outlook as dismal output casts doubts on recovery
BANGKOK (REUTERS) - Thailand cut its growth outlook this year and said policy would stay supportive as poor manufacturing output suggested South-east Asia's second-largest economy may struggle to emerge from recession.
The fifth straight month of contraction in manufacturing output, worst than the market had expected, has fanned debate on when the Thai economy can pull out of a downturn. Thailand is grappling with a current account deficit and capital outflow pressures ahead of a tapering in US monetary stimulus.
Thailand's finance ministry on Friday cut the outlook on growth for the year to 3.7 per cent from 4.5 per cent projected in June due to weak exports and slower domestic demand.
"The MPC (monetary policy committee) is expected to keep the policy rate on hold until next year to support economic growth," the ministry's fiscal policy office chief, Mr Somchai Sajjapong, told a news conference. "But next year, there is a chance that the rate will go higher if inflationary pressure picks up."