Kasikorn Research Center joined the growing list of agencies cutting projections for the Thai economy, saying that, despite improvement from 2014, growth during 2015 will come in at just 2.8%, down from an initial estimate of 4%.
K-Research anticipated exports will decline 3.9% in the first quarter while consumer consumption remains weak due to high household debt levels. The first quarter also would see businesses waiting for clearer signal of recovery and government investment, according deputy managing director Pimonwan Mahujchariyawong.
For the full year, the research house sees exports flat, down from 3.5% growth projected earlier.
However, it sees tourism recovering, with international arrivals up 15.9% in January year-on-year. The Ministry of Tourism and Sports said January arrivals increased 16.3%.
The government's decision to increase its stimulus programme and low inflation also are pluses for economic growth, K-Research said.
Ms Pimonwan said dropping global crude oil prices have created pressure on exports of commodities, including farm products, chemicals, liquefied petroleum gas and oil products. However, low crude prices, projected at an average of US$60 per barrel, will help keep inflation at low levels.
She said the K-Research Household Economic Condition Index in February dropped slightly from January, but it was still below 50, indicating that consumers expect worsening economic conditions.
K-Research found that the government's disbursement of its regular budget in the first half of the 2015 fiscal year through March 13 was on par with the same period in 2014. However, disbursement of its investment budget was only 35.2%. That is low, but still better than 21.8% at the same point in 2014, the institute said.
The research house is not the first agency to revise down its prospects for the economy. On Friday, the Bank of Thailand lowered its 2015 economic growth forecast to 3.8% from 4%.
The central bank cited possible delays in government spending, weakening consumer and investor confidence and a slower-than-expected global recovery.