Based on their projections, CIMB Thai believes the Thai economy would expand by 3.2% this year. High inflation, rising interest rates, and a devalued baht are just a few of the problems that Thai firms will have to confront in the coming year, as the report admits.
The bank’s assistant managing director, Mr. Amonthep Chawla, has disclosed that CIMB Thai Bank believes the economies of the United States and the European Union may enter recession next year. Neither recession will be particularly severe or widespread. CIMB Thai forecasts that global economic growth would speed up to 2.9% this year and then slow down to 1.5% in the next year.
Mr. Amonthep, who also heads the research office at CIMB Thai, has stated that the Thai economy faces a number of obstacles due to the slight recessions in the economies of the United States and the European Union. Loss of buying power in the United States and the European Union might lead to a decline in export growth. You’d see it most clearly in the car parts and computer components sections.
In the event that the purchasing power of farmers, grassroots activists, and small and medium-sized businesses (SMEs) continues to decline, the purchasing power of households will remain low for a longer period of time. It is consequently anticipated that by mid-2023, the Bank of Thailand would raise the policy rate to at least 2%. Meanwhile, the United States is planning to increase its policy rate to at least 5% by the middle of 2023. Money will flow into the US dollar, keeping the value of the baht low until about the middle of 2023 as a result of the wide gap between US and Thai interests.
Mr. Amonthep said that CIMB Thai anticipates the tourist industry in Thailand to continue its comeback. It is predicted that by the end of 2022, 10 million international visitors would have visited Thailand. By 2023, this number will have risen to 20 million. Thailand’s economy, which relies heavily on tourist spending, is forecast to grow. The research department at CIMB Thai anticipates GDP growth of 3.2% this year and 3.4% next year.
It does, however, imply that, in the face of poor global economic growth and several uncertainties, small firms are keeping their cash on hand. It recommends small and medium-sized enterprises (SMEs) employ technology to cut expenses, increase their online marketplaces, and form partnerships with bigger enterprises. With borrowing rates on the rise, it suggests that people cut back on frivolous spending.
