IMF lowers Thai growth forecast to 3.5% for 2015

[BANGKOK] The International Monetary Fund (IMF) lowered its forecast for Thailand's economic growth to 3.5 per cent in 2015, and 0.5 per cent growth in 2014, amid concerns over political stability, weak export demand and slow consumption.

Thailand's military government has struggled to revive growth in Southeast Asia's second-largest economy since seizing power in May to end prolonged political unrest that hurt tourism, investment and consumption.

The IMF's latest forecast is below the Thai central bank's expectation for 4.0 per cent growth this year, and marks a downward revision from its previous forecast in October for 1.0 per cent growth in 2014 and 4.6 per cent growth in 2015.

Thailand has scope to ease monetary policy if economic recovery is weaker than anticipated, the IMF said in a statement on Wednesday.

The IMF said the fall in world oil prices should help fuel a recovery in consumption in 2015, and private investment should also recover after the authorities approved a backlog of projects that built up when the previous civilian government was paralysed by protests.

The Bank of Thailand said on Tuesday it had no plans to adjust monetary policy despite the first decline in consumer prices in more than five years in January.

Deflation has led to monetary easing elsewhere in the world, but Thailand's central bank held its interest rate steady at 2.0 per cent at a policy meeting last week.

REUTERS