Top Thai business group cuts 2015 export growth forecast to below 1%

[BANGKOK] Thailand's top business group said on Tuesday it has further cut its 2015 export growth forecast to less than 1 per cent, but maintained its economic growth forecast for the year at 3.5 per cent.

The downgrade came after exports fell more than expected in February, showing that a key growth engine for the country is still sputtering.

Tourism and government spending would be key drivers of the economy this year, according to a joint business group of the Thai Chamber of Commerce, the Federation of Thai Industries (FTI) and the Thai Bankers' Association.

Government investment is expected to accelerate from late in the second quarter into the third quarter, FTI chairman Supant Mongkolsuthree told a news briefing. "We hope to see the speed of budget disbursement improving in coming quarters, which will support the economic recovery,"he said.

Last month, the Bank of Thailand (BOT) trimmed its 2015 GDP growth projection to 3.8 per cent, from 4.0 per cent seen three months earlier, and warned of 'downside risks' as exports will barely rise and domestic demand is still weak.

Last June, a month after the army seized power to end political turmoil, the central bank projected 5.5 per cent growth in 2015.

Private sectors and the Ministry of Commerce will seek new markets to boost exports while promoting sales of competitive products such as food, automotives and healthcare, he said.

Key exports markets such as Europe, Japan and China are expected to remain weak while US market will expand, he said.

Last month, the group cut its 2015 export growth estimate to 2.0-2.5 per cent from 3.5 per cent. Exports equal more than 60 per cent of the economy.

REUTERS