Central bank expects growth forecast to hit the mark
As the final numbers for 2018 were being tallied, the Bank of Thailand believes its forecast of 4 percent growth has been achieved thanks to rising consumption and investment propelled in part by commercial banks expanding mobile network capacities to accommodate the year-end surge in consumer spending.
Pornpen Sodsrichai, director of the bank’s economic and policy department, said that all indications were that the target would be met. Thai businesses remain optimistic despite a cooling global economy, as indicated by a modest but steady rise of nearly 1 percent in the manufacturing production index in November.
Although exports are the primary pillar of growth in the Thai economy, the other two pillars of consumption and investment were chiefly responsible for the positive economic momentum, Pornpen said. A better balance between the three pillars is a goal towards which that successive governments and economic policymakers have been working.
To facilitate more spending by consumers, commercial banks doubled their mobile transaction capacity compared to the same period last year when system glitches put a dent in purchases. Predee Daochai, chairman of the Thai Bankers Association, said banks also tightened their cybersecurity defenses so that a rise in fraud would not accompany the increased volume in transactions.
“With these preparations, we hope everything will go smoothly,” Predee said.
In March, banks waived digital transaction fees, and since then the growth in online payments has been dramatic, he said. The Thai Chamber of Commerce also forecast that consumer spending over the year-end holidays would be 2.5 percent higher than last year at nearly $4.2 billion.
Pornpen said that private consumption had expanded by 4.4 percent compared to 2017, and the rise in spending has been stimulating manufacturing production, especially of automobiles and petroleum products. Vehicle purchases remained robust in December, she said.
Private investment was also healthy. Through November, private investment was up 3.1 percent year on year as many firms poured funds into new equipment and machinery.
Preedee, who is also chairman of Kasikorn Bank, one of the top four Thai banks, said that exports would probably slow in 2019 because of global trade tensions and other factors. However, consumption and investment would provide a cushion for the economy, he said, and growth would remain steady or slightly higher than in 2018.