03/02/2012
[ECON]Thailand Macro Watch: BoT: downside risks to growth; inflation risks balanced BoT: 2012 GDP growth 4.9%
The Bank of Thailand (BoT) revised down its 2011 GDP growth forecast to 1% from 1.8% in its Oct report after seeing worse flood impacts. GDP is forecast to grow 4.9% and 5.6% in 2012 and 2013 respectively. The upward adjustment to GDP in 2012 (from 4.1%) is partly the result of lower GDP in 2011. Consensus growth is at 4.1% and 4.6%, while our forecast is at 4% for both 2012 and 2013.
The 18 Jan cabinet reshuffle came relatively early given that the govt. came to power only five months ago. The reshuffle was also more extensive than earlier thought, affecting 16 ministers and seven key ministerial portfolios, namely defense, commerce, finance, industry, transport, energy and education. Deputy PM Kittiratt is now also in charge of finance while relinquishing his commerce portfolio. According to what has been reported in the press this is expected to pave the way for more aggressive fiscal spending combined with a tougher stand in pressing the Bank of Thailand to help pay for FIDF debt. Another proposed method of bringing down public debt (to pave the way for more public borrowing) is the proposal to sell down a small portion of govt. holdings in key state enterprises to less than 50% so that govt. guarantees on the debt of these enterprises can be withdrawn. The govt. would retain control because the shares are to be sold to Vayupak, a govt.-controlled mutual fund.
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