Finance Ministry cuts 2021 GDP forecast to 2.3%
The Finance Ministry slashed its 2021 GDP growth forecast from 2.8 per cent to 2.3 per cent on Thursday, citing the impact of fresh Covid-19 outbreaks on the Thai economy.
The surge in infections here and abroad would affect international travel to Thailand, said the ministry’s Fiscal Policy Office.
However, it expects Thai exports to grow 11 per cent this year as the world economy continues to recover.
Private consumption and private investment are expected to grow at 2.3 per cent and 4.8 per cent this year, respectively.
Government consumption and public investment will rise 5 per cent and 10.1 per cent this year, according to the ministry forecast.
For domestic economic stability, core inflation in 2021 is expected to be 1.4 per cent, up from last year in line with the global economic recovery and oil price rise. The current account will maintain a surplus of $1.1 billion, or 0.2 per cent of GDP, down from last year due to fewer foreign tourists and the rising cost of imported goods, said the ministry.
The ministry identified four risk factors to the Thai economy: new waves of Covid-19 here and abroad, restrictions on foreign tourists, potential crude oil price rises due to geopolitical conflict and energy policy adjustments, and fluctuations in the global financial system and international capital flows.
However, Thailand’s stable fiscal position meant the ministry was ready to implement additional fiscal measures in line with the changing economic situation, driven by public spending and investment.