Thai economy faces slowdown

PHOTO: Thai economy faces slowdown

BANGKOK - Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has conceded that China's economic slowdown could have a negative impact on Thailand's economy, and is expecting at least three major economic agencies to revise down Thailand's forecasted growth this year.

However, Kittiratt said that although China's central bank had admitted to facing the country's worst cash crunch in over a decade, the economic giant would remain Thailand's major trading partner and was still expected to register higher growth rates than many other countries - including Thailand.

The People's Bank of China has provided liquidity to some financial institutions to stabilise money-market rates and will use short-term liquidity operations and existing lending-facility tools to ensure steady markets, Bloomberg quoted the central bank as saying on Tuesday.

However, Bloomberg said Chinese stocks fell to a four-year low yesterday as the central bank's pledge to stabilise money markets failed to ease concerns that elevated funding costs will curb economic growth.

"Lingering concerns over China's economic slowdown clouded market sentiment," Bloomberg quoted Navarat Kaewpratarn, a senior marketing official at Future Agri Trade Co, as saying.

China and other global economic uncertainties could pressure the Fiscal Policy Office, the National Economic and Social Development Board and Bank of Thailand to revise down their growth estimates for Thailand this year, Kittiratt said.

He added that there was now much fluctuation in the capital markets after Federal Reserve chairman Ben S Bernanke commented on the possibility of paring bond purchases.

However, such likely US economic stimulus could positively impact the economy in the long-term as high global liquidity would bring with it volatile global market speculation, he said.

"I have coordinated with the Securities and Exchange Commission and the Stock Exchange of Thailand and understand that most investors in our stock market have not made investments on borrowed capital. Therefore, there may not be much concern over declining stock prices, given their satisfactory performance," Kittiratt |said.