The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) agreed today to lower down the economic growth projection (GDP) to 2.7-3% from 2.9-3.3% due to weakening economic growth during the first three quarters of the year.
The global economic slowdown, as a result of trade tensions between China and the United States, compounded by a strong baht currency, continues to dampen exports, with impacts on the production sector. Domestic consumption and investment also remain weak, said the JSCCIB adding, however, that the tourism sector shows slight growth.
The joint committee, involving the Thai Chamber of Commerce, the Federation of Thai Industries and the Thai Banking Association, also predicted continuing contraction of exports from -1% to 1% to -2% to 0.0%.
The committee noted that the government’s Chim-Shop-Chai program and other stimulus-related measures, such as price subsidies for farm products and the rehabilitation program for flood victims, will drive the economy up by 0.1 to 0.2% at best.
To reduce the risk posed by foreign exchange fluctuations, the committee expected the central bank to begin using Thai baht and other regional currencies for trade transactions to replace the US dollar.
It also proposed that the government cut inter-bank rates for SMEs which have been affected by flooding and are debtors to financial institutions. The committee also recommended the provision of new funding for SMEs to repair buildings and plant damaged by flooding.
