Bangkok (VNA) – Thailand’s GDP growth forecast for 2020 has been setat 2.5-3 percent by Kasikorn Research Centre (K-Research) as compared to 2.8percent growth seen this year.

According to K-Research, the country needs additional stimulus to meet theupper edge of the estimated range. The 2020 economic outlook will likely sufferfrom external risk factors, particularly the US-China trade war and furtherdampening of exports.

Amid this gloomy sentiment, the research house predicts Thailand's exports tocontract 2 percent next year, said assistant managing director NattapornTriratanasirikul, adding fiscal policy should be the key instrument to supporteconomic momentum while global uncertainties remain.

Additional stimulus packages would help the economy to grow by 3 percent nextyear. Otherwise it would be below 3 percent. Otherwise, it would be below 3percent, she said.

Measures should be targeted towards small and medium-sized enterprises that areaffected by the trade war, especially those reliant on exports, she said. Theseindustries could see a higher lay-off rate, which was 4.5 percent in July, upfrom 2.8 percent in April and 1.9 percent in January.

Nattaporn suggested the government should resume its soft-loan schemes for SMEsin order to ease the financial burden of this business segment and slow downstaff lay-offs.

K-Research slashed its 2019 GDP growth forecast from an earlier projection of3.1 percent to 2.8 percent because the US-China trade dispute intensified. Theresearch house also cut its export growth outlook from zero to a 1 percentcontraction for this year after shipments shrank 2.2 percent year-on-year inthe first eight months.

The Thai baht is expected to remain firm until the first quarter of next yearunder a short-term assumption. K-Research estimates that the US Federal Reserveand the Bank of Thailand (BoT) will each cut the policy rate one more time thisyear and once more next year, with Thailand's rate falling from current 1.5percent to 1 percent in 2020.

BoT Governor Veerathai Santiprabhob said the economic growth forecast of 2.8percent for 2019 is below potential, and monetary policy will be reviewed ifconditions worsen.

Last week, the BOT'smonetary policy committee (MPC) left the benchmark policy rate unchanged at 1.5percent, after August's surprise cut, the first easing since 2015. The MPC willnext review monetary policy on November 6./.