The private sector has not resumed investment and domestic consumption remains weak, cramped by rising household debt, says Veerathai Santiprabhob, a member of the State Enterprise Policy Commission and an adviser to the Thailand Development Research Institute.
However, he said the country’s second-half economic growth could be higher than in the first six months due largely to stable politics and government spending.
Economic growth this year could come in at between 1.5% and 2%, a low level among developing countries.
Exports still have structural problems and will continue declining, especially in the electronics sector due to an absence of development since the 2011 floods, Mr Veerathai said.
The economy has a labour shortage, while the education system cannot supply human resources to serve market demand, he said, adding that the country needed investment in logistics to serve economic growth.
Phatra Securities managing director Supavud Saicheua said the US Federal Reserve was expected to end its stimulus in October, and this could put pressure on emerging markets, as fund flows could flee to developed countries.
Poranee Thongyen, research manager at Asia Plus Securities, said the Stock Exchange of Thailand (SET) index was likely to fall to 1,470 points this quarter after rising by 19% over the past two months.
Kavee Chukitkasem, assistant managing director at Kasikorn Securities, is confident the SET index will not fall below 1,500.
“The SET could drop this quarter but will rebound in the final quarter. The consensus is it will reach 1,620 next year,” he said.
First published: Bangkok Post, July 26, 2014