ANZ Bank lowers growth forecast for Thailand for 2019 and 2020

May 13, 2019

BANGKOK - ANZ Bank has lowered its 2019 growth forecast for Thailand to 3.2% from 3.8% previously to reflect poor economic data year-to-date and multiple economic challenges. It has also knocked its 2020 growth forecast - to 3.3% from 3.6%.

AND says Thailand's Q1 GDP data, due to be released on May 21, will likely disappoint amid weakness in exports and investment. "We expect the growth outturn to be the weakest in four years," the bank says in a research note.

"The economy continues to face multiple headwinds, ranging from weak external demand, an inventory overhang, sluggish tourist arrivals, unfavourable weather, high household debt, public investment delays, and political uncertainty.

ANZ says that while the Bank of Thailand (BoT) has been reluctant to shut the door on monetary policy normalisation, ANZ expects its focus to shift decisively towards guarding downside growth risks.

"Our position continues to be that the BoT will remain on hold throughout both 2019 and 2020, but we think the balance of risks is tilted towards a rate cut."