Southeast Asia’s second-largest economy grew 5.3 percent, official data showed today, compared with a revised 19.1 percent gain in the previous three months and the median forecast in a Bloomberg survey for a 6 percent expansion. The National Economic and Social Development Board scaled back its forecast for 2013 growth to as much as 5.2 percent today, from an earlier projection of 5.5 percent. The Bank of Thailand will review policy on May 29.
The weaker data indicates the central bank is “probably going to go ahead with the rate cut,” said Enrico Tanuwidjaja, a Singapore-based economist at Royal Bank of Scotland Group Plc. “It’s now a matter of how much they are going to cut. We believe a 50-basis-point rate cut is quite likely.”
The one-year onshore swap rate, the fixed cost needed to receive a floating payment, declined two basis points, or 0.02 percentage point, to 2.37 percent as of 10:33 a.m. in Bangkok, according to data compiled by Bloomberg. The gauge touched 2.36 percent earlier, the lowest level since May 13.
The yield on the 3.625 percent government bonds due May 2015 decreased one basis point to a one-week low of 2.68 percent, data compiled by Bloomberg show.
Finance Minister Kittiratt Na-Ranong, who has led calls for lower rates, said May 10 the monetary authority must reduce borrowing costs by more than a quarter of a percentage point or implement capital controls to slow inflows that drove the baht to a 16-year high. The central bank lowered the benchmark rate in October and has held it at 2.75 percent since.
The baht was unchanged at 29.86 per dollar, according to data compiled by Bloomberg. It has advanced 2.4 percent this year, the best performance in Asia. The currency reached 28.56 on April 22 and April 19, the strongest level since July 1997.
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