The World Bank is cutting its forecast for Thailand's GDP this year on a sluggish third quarter and weak exports, says Kirida Bhaopichtr, the bank's senior economist for Thailand.
Ms Kirida, a World Bank senior economist, said exports are projected to recover by5% next year. APICHART JINAKUL
A revised GDP growth figure will be announced next month, she said.
The bank has already dimmed its outlook on Thailand's GDP over 2013 from 4.5% down to a rise of 4%.
Thailand's Fiscal Policy Office (FPO) is also poised to drop its forecast on GDP growth this year from 3.7% down to 3%, said director-general Somchai Sujjapong.
"The new projection is based on the estimation of the National Economic and Social Development Board (NESDB), which recently forecast no growth for the export sector this year," he said.
The FPO's revised projection, due to be announced next month, also reflects slow growth in domestic consumption and in investment across both the public and private sectors.
But the fundamentals of the Thai economy remain strong, he said.
The new 3% growth forecast is based on low inflation and unemployment at only 0.6% to 0.7%, while fiscal reserves remain healthy and financial institutions are still quite strong, said Mr Somchai.
The Monetary Policy Committee will likely keep the key interest rate at 2.5% at its meeting next Wednesday, he said.
"[Therefore], despite the global economy volatility, we have been able to sustain growth moderately," said Mr Somchai.
Thailand's GDP was up 2.7% year-on-year in the third quarter, slipping from a 2.9% rise in the previous quarter and 5.4% in the first quarter.
Over the first nine months, GDP climbed by 3.7%, prompting the NESDB to slash its 2013 full-year growth estimate to 3%, down from a range of 3.8% to 4.3% predicted in August, with exports as low as stable.
Although exports nudged up by only 0.2% year-on-year over the first three quarters, the World Bank projects a 1% rise for the full year, down from 2.5% predicted earlier, said Ms Kirida.
In 2014, exports are expected to rebound by 5%, helping to revive Thai economic growth on the back of a global recovery, she said.
But Thailand must manufacture products such as table computers and smartphones more competitively to meet rising global demand for high-tech gadgets, said Ms Kirida.
Tourism is unlikely to suffer much from current protests, unless they turn violent, but any dip would hit the year's GDP figure as peak season coincides with the fourth quarter.
Ms Kirida said government infrastructure and water management projects will be key drivers for growth next year, so GDP growth may fall below 4-5% if investment continues to be delayed.
Likely external factors for the Thai economy include tapering of the US Federal Reserve's monetary stimulus and a rise in the US government's debt ceiling coupled with uncertainty over the global economy, she added.