SCB revises down GDP growth to 1.6%

Siam Commercial Bank has slashed its 2014 economic growth projection to 1.6% from 2.4% on protracted political problems.

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Investors' confidence has waned while household consumption slid by 0.5%, public investment by 6.6% and private investment by 2.8%, said Sutapa Amornvivat, chief economist and first executive vice president at Siam Commercial Bank (SCB).

"But we believe the chance of a gross domestic product contraction is slim, whether a new government is formed or not.

"In any case, Thailand will likely have a new government this year but the impacts will continue to be felt until next year," said Mrs Sutapa, who heads SCB Economic Intelligence Center, the bank's research unit.

"If the political situation does not get worse, the economy has already bottomed out, with a 0.3% contraction in the first quarter."

The centre has revised down this year's export growth rate to 4% from 5% after shipments contracted by 1% in the first quarter on a sharp decline in automobiles and parts orders from China and Australia, Thailand's key markets.

Farm products such as rubber and seafood were hit by a price slump.

Growth is seen in automobile shipments to secondary markets such as Saudi Arabia, Malaysia and the Philippines while recovery signs were detected in electronic products and electrical appliances, she said. 

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