Thailand lowers 2022 GDP outlook on war in Ukraine, China slowdown

BANGKOK • Thailand's main economic forecasting agency has lowered its growth estimate for this year and raised its inflation expectations, due to the impact on the global economy from Russia's war in Ukraine and a slowdown in China.

The National Economic and Social Development Council (NESDC) said yesterday that it sees gross domestic product expanding 2.5 per cent to 3.5 per cent, lowering its outlook range by a full percentage point from its previous estimate.

"The big concern now is the conflict between Russia and Ukraine, which has a chain-reaction impact," NESDC secretary-general Danucha Pichayanan said at a briefing. He added that the Covid-19 situation in China is "also another risk" as the country is one of Thailand's major export markets.

The slower full-year outlook contrasts with a better-than-expected performance last quarter, amid rising tourist arrivals and exports. The country's GDP in the three months ended March advanced 2.2 per cent from a year ago, the NESDC said, faster than the 1.7 per cent median estimate in a Bloomberg survey and a 1.8 per cent expansion in the previous quarter.

The baht extended its gain to 0.5 per cent against the United States dollar following the GDP data, according to figures compiled by Bloomberg.

The growth figures come as the Bank of Thailand faces consumer prices that have accelerated faster than its 1 per cent to 3 per cent target range since the beginning of this year.

Central banks in Asia from India to Malaysia have begun moving away from their easy money policies as they prioritise fighting inflation over bolstering economic growth.

The NESDC raised its headline inflation forecast for this year to between 4.2 per cent and 5.2 per cent, from 1.5 per cent to 2.5 per cent in February, while predicting a current account deficit of 1.5 per cent of GDP, flipping from a surplus of 1.5 per cent expected earlier.

It also reported that GDP in the first quarter rose 1.1 per cent from the previous three months, compared with growth of 0.9 per cent expected in the survey.

BLOOMBERG