“Thailand’s government lowered its full-year growth forecast after the economy expanded less than analysts estimated last quarter, boosting the case for the central bank to cut interest rates.
Gross domestic product increased 5.3 percent in the three months through March from a year earlier, after expanding a revised 19.1 percent in the previous quarter, the National Economic and Social Development Board said in Bangkok today. The median of 13 estimates in a Bloomberg News survey was 6 percent.
The growth slowdown may give the Bank of Thailand scope to join a global wave of monetary easing, after resisting pressure from the government in recent months to lower borrowing costs and curb inflows that last month drove the baht to a 16-year high. Finance Minister Kittiratt Na-Ranong, who has led calls for lower rates, has said the central bank must cut by more than a quarter of a percentage point or implement capital controls.
“The recovery in external demand that will be positive for Thai exports is not happening,” and weaker growth justifies an interest-rate cut, said Enrico Tanuwidjaja, a Singapore-based economist at Royal Bank of Scotland Group Plc. “The baht’s strength is an additional factor to motivate a rate cut.”….”
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