BANGKOK, Dec 13 – The Thai economy is set to grow at most only 2 per cent next year as many think tanks forecast earlier, according to a top banker.
Still, Kosit Punpiumrat, executive chairman of Bangkok Bank, the country's largest commercial bank, said all parties concerned must monitor to determine how effective the fiscal and monetary policies adopted by other countries worldwide will be.
Should such policies from other countries produce fruitful results, it would benefit Thailand's economic growth.
But should they just produce temporary results, the economy might slow down or even contract next year and following years because 70 per cent of Thailand's gross domestic product (GDP) growth counts on exports.
In the fourth quarter of this year, he said, the economy is projected to contract.
He believed interest rates next year would be on a decline from this year, which could help boost the economy to a certain extent.
Mr. Kosit said efforts to stimulate the economy through monetary policy alone has some drawbacks since interest rate cuts cannot be done if the rate stays very low.
So, it is necessary to bring the fiscal policy to help jump start the economy particularly when the private sector is not in a position to boost the economy significantly.
Bangkok Bank president Chatsiri Sophonpanich said his bank has set its loan growth target next year at 5 per cent, close to the 5-7 per cent projected earlier, and that he expected the GDP would grow some 2-3 per cent.
