Thailand’s economic growth forecast revised down

Picture courtesy of Bangkok Post

The Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) has revised Thailand’s economic growth forecast downward from a range of 2.8 to 3.3% to 2.2 to 2.7% for the year. The revised outlook is due to a slowdown in exports, which is negatively affecting the manufacturing sector.

The panel also flagged a decrease in export expansion from 2% to 3% to 0.5 to 1.5% and a fall in inflation from 0.7 to 1.2% to 0.5 to 1%. The JSCCIB attributes the downgrade to a fall in global trade growth from 3.3% to 3% due to conflicts in the Middle East and Ukraine.

Kriengkrai Thiennukul, the chair of the JSCCIB meeting and the Federation of Thai Industries, referenced the latest global trade estimate from the International Monetary Fund. He noted that Thai exports have already decreased by 0.2% in value year-on-year in the first quarter of this year due to the global trade slowdown.

Furthermore, the JSCCIB highlighted that the Manufacturing Production Index in Thailand fell by 5.13% year-on-year to 104 points in March, marking an 18th consecutive month of decline, according to the Office of Industrial Economics. The committee also noted a 4.4 percentage point decrease in capacity utilisation to 62.3% this month.

In light of these indicators, the JSCCIB has urged the government to reconsider its proposed increase in the daily minimum wage to 400 baht (US$11) nationwide, which it deems too high. The panel supports the Thai Chamber of Commerce in calling for the government to cancel the wage rise, scheduled for October 1.

The committee is preparing a letter to the Labour Ministry to reconsider the wage hike proposal, arguing that it will impact businesses, particularly those that are labour-intensive or smaller enterprises such as street food vendors.

Kriengkrai noted these businesses are already grappling with high energy costs and weak purchasing power. On January 1, the nationwide daily minimum wage for Thais rose, with variations between provinces ranging from 330 to 370 baht (US$ 9 to US$10). The increases ranged from 2 baht to 16 baht, averaging 2.37%, reported Bangkok Post.

The wage committee later approved an increase to 400 baht for tourism-related businesses and four-star hotels with at least 50 employees in 10 provinces, effective from April 13. The government has announced plans to advocate for further minimum wage hikes in other areas and business sectors.

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