Standard Chartered Sees Thai Economy to Recover in 2H, Following with a Rate Cut in Sep.

The economist of Standard Chartered, Tim Leelahaphan, has revised down the GDP forecast of 2019 from 3.3% to 3% in a note on Wednesday, August 22, 2019.

Not only the GDP forecast of 2019 that had been revised down, 2020 GDP was lowered to 3.5% from an estimation of 4% while the 2021 GDP forecast was also lowered to 4% from the previously forecasted at 4.5%.

Mr. Tim Leelahaphan stated that the downgrade was due to the disappointment in growth in the first half of 2019, possible delay in budget implementation and the prolonged U.S.-China trade war.

However, Thai economic growth is expected to improve in the second half of 2019 after a rate cut from BOT from 1.75% to 1.5% to ease the economic slow down as well as the recently announced fiscal stimulus package which should be able to support the economy later in the third quarter along with a low base for exports and tourism.

More importantly, it is expected that the BOT will cut benchmark rate to 1.25% in September from the previous forecast with no change.