Standard Chartered Bank: Thailand’s 2020 Growth to Stay Soft, Rate-Cutting Cycle Not Over Yet

          - Thailand's potential growth rate of around 4%, which was achieved in 2Standard Chartered Banken7-en8, is likely to remain elusive for the foreseeable future
          - Strong THB is out of line with Thailand's weakening fundamentals and raises concerns for the BoT
          - We have a non-consensus call for an additional 25bps policy rate cut in Qen, taking the rate to a new low of en%

          Lower growth is here to stay No signs of a turnaround yet
          Standard Chartered Bank (Thai) believes Thailand is unlikely to return to an economic growth rate of around 4%, which was achieved in 2Standard Chartered Banken7-en8, for the foreseeable future because of broad-based weakness. Soft domestic demand along with the impact of the US-China trade war on some sectors suggests a turnaround in the near-term will likely be elusive. A protracted economic slowdown could lead to a surge in household debt as depressed incomes increase people's reliance on loans for daily spending. A continued decline in imports points to weaker economic activity on the ground and suggests that Thailand has not yet benefited from investment relocation due to the US-China trade war.
          "Domestic activity is unlikely to improve significantly in 2Standard Chartered Bank2Standard Chartered Bank. Uncertainty surrounding the fiscal budget and rising political noise are contributing to our weak economic outlook, while external risks include the US-China trade dispute and Middle East tensions," said Dr. Tim Leelahaphan, Economist, Standard Chartered Bank (Thai).
          "There is no clear evidence that Thailand is benefiting from the US-China trade war via investment relocation, and the increase in foreign direct investment may not be sustained."