Thailand's 2014 economic growth forecast lowered

Thailand's National Economic and Social Development Board (NESDB) on Monday cut its forecast for the country's economic growth in 2014 to a range of 1.5-2.5 percent from the previous 3-4 percent.

There was a 2.1 percent contraction in the first quarter of 2014, compared with the previous three months, the state planning agency said, adding the first quarter shrank 0.6 percent year-on- year.

The NESDB revised the growth rate for the fourth quarter of 2013 from the previous three months to 0.1 percent from 0.6 percent, thus leaving the year-on-year growth for the October- December period to stand at 0.6 percent.

Many sectors of the Thai economy have been adversely affected by the protracted political unrest and the fact that the country has been run since December last year by a caretaker government with restricted fiscal powers.

The NESDB also slashed its projection of 2014 export growth from 5-7 percent to 3.7 percent.

In the first quarter of this year, exports fell 0.8 percent year-on-year and about 0.5 percent from the previous three months, figures from the Bank of Thailand, the central bank, showed.

Thai Airways International has been severely affected by the politics, chairman Prajin Juntong said.

The company suffered a net loss of 2.6 billion baht (80.4 million U.S. dollars) in the January-March period, Prajin said, adding losses are also expected in the second and third quarters as the spillover of the political tumult was deterring travelers from flying to Thailand.

The Tourism Council of Thailand has cut its forecast for tourist arrivals in 2014 from 28 million to 26.3 million, the lowest in five years.Vice-president of the council Pornthip Hirunkate said that so far the political crisis had possibly cost about 100 billion baht in tourism revenue.