KONTAN.CO.ID - BANGKOK. The World Bank on Friday cut its estimate for Thailand's economic growth to 2.7% this year, but that is faster than last year's pace as private consumption recovers and investment increases due to the launch of large infrastructure projects. The bank had expected the economy to expand 2.9% this year in its economic report on Thailand in October. It estimated 2019 growth at 2.5%, a five-year low, due to declining exports and weakness in domestic demand, it said in a statement. The economy expanded 4.1% in 2018.
Southeast Asia's second-largest economy is heavily reliant on exports, which have been hit by U.S.-Sino trade tension and a strong baht, while investment has been sluggish. "The recent growth slowdown has highlighted Thailand's long-run structural constraints, with slowing investments and low productivity growth," the bank said. "If current trends continue, with no significant pick-up in investment and productivity growth, Thailand's average annual growth rate will remain below 3%". To achieve its vision of being a high-income country by 2037, Thailand will need to sustain long-run growth rates of above 5%, which would require a productivity growth rate of 3% and increase investment to 40% of GDP, the bank said. "Boosting productivity will be a critical part of Thailand's long-term structural reform," said Kiatipong Ariyapruchya, World Bank senior economist for Thailand. Read Also: World shares up as China data fuels bets on growth