Consumption rebound seen as less likely

There are no indications that domestic consumption, the economy’s main growth driver, will rebound in the fourth quarter to boost the lacklustre Thai economy as has been expected, says Bangkok Bank (BBL).

Kosit Panpiemras, executive chairman of the country’s largest bank by assets, yesterday said he estimates economic growth will come in below BBL’s current 4% projection.

However, BBL has no plans to revise down its forecast for the remaining months of this year.

Mr Kosit’s comments are not considered especially pessimistic, as CIMB Thai Bank recently slashed its gross domestic product (GDP) growth forecast to 2.8% for this year, as did HSBC.

The Bank of Thailand earlier said it planned to trim its forecast from the present figure of 4.2%.

The National Economic and Social Development Board, in its latest quarterly assessment last month, cut the full-year expansion rate to between 3.8% and 4.3% from 4.2% to 5.2% after disappointing first-half growth.

GDP grew by a revised 5.4% year-onyear in the first quarter and 2.8% in the second quarter.

On a quarterly basis, it shrank by a revised 1.7% in the first quarter and 0.3% in the second quarter.

Mr Kosit said the main economic drivers of domestic consumption and exports are still running out of steam amid a nascent global recovery and rising household debt following the government’s domestic stimulus policies.

Exports will likely grow by a mere 2-3% this year, he said.

‘‘Domestic consumption will not help to support the Thai economy any more after running full-throttle since last year. I remain concerned about the country’s household savings,’’ he said.