SCB EIC anticipates two policy rate cuts in April and June 2024

SCB EIC lowers Thai economic growth forecast for 2024 to 2.7% due to weak manufacturing sector, structural challenges, and anticipates policy rate cuts to sustain neutral monetary policy.

SCB EIC estimates a decrease in Thailand’s potential GDP growth to 2.7% for the long term (2024-2045), driven by declining total factor productivity and deepening structural challenges in the manufacturing sector.

The forecast includes two expected policy rate cuts by the MPC in April and June 2024 to sustain a neutral monetary policy stance and support economic growth while alleviating high debt burdens for vulnerable businesses and households.

RelatedArticles

Bank of Thailand Keeps Interest Rate Unchanged, Defying Government Pressure

December 20, 2024

Green finance in ASEAN+3: balancing sustainability and financial stability

December 19, 2024

The Bank of Thailand keeps its benchmark interest rate steady at 2.25%

December 18, 2024

Reserve Bank of India to Maintain a Cautious Stance

December 14, 2024

SCB EIC has revised down the Thai economic growth forecast for 2024 to 2.7% due to a moderation in economic momentum and slow recovery in the manufacturing sector, impacted by structural challenges. Despite anticipated growth in demand factors such as exports and private investments, challenges persist with weakening momentum from the public sector and high inventory levels within the manufacturing sector hindering overall progress.

The manufacturing sector faces challenges on both the supply and demand sides, including higher penetration of imports, sluggish overseas demand, delays in budget acts, geopolitical risks, and high inventory levels. These factors contribute to a lower competitiveness in Thai exports and hinder the sector’s recovery trajectory, reflecting significant structural challenges within the industry.

Source link