Thailand's GDP growth is forecast at 3.8% for both 2019 and 2020, down from an expected 4.1% this year, the World Bank says, citing the gradual structural slowdown in China.
Global economic growth is expected to expand at a slower pace over the next two years as growth in advanced economies decelerates and the recovery in commodity-exporting emerging markets levels off, the globle lender said.
Thailand is also classified among various Asian countries experiencing financial sector vulnerabilities and elevated household debt, the World Bank said.
Economic activity in advanced economies is expected to grow by 2.2% in 2018 before easing to a 2% expansion rate next year and 1.7% in 2020 as central banks gradually remove monetary stimulus programmes, according to the bank's report on global economic prospects released yesterday.
Overall economic growth in emerging markets and developing economies is projected to strengthen to 4.5% in 2018 before reaching 4.7% in 2019 and 2020 as the recovery in commodity exporters matures and commodity prices level off after this year's increase, the World Bank said.
"This outlook is subject to considerable downside risks," the bank said. "The possibility of disorderly financial market volatility has increased, and the vulnerability of some emerging market and developing economies to such disruption has risen. Trade protectionist sentiment has also mounted, while policy uncertainty and geopolitical risks remain elevated."
Economic growth in the East Asia and Pacific region, meanwhile, is expected to gradually moderate from 6.3% in 2018 to 6.1% on average during 2019-20.
"The slowdown in regional growth is largely due to the gradual structural slowdown in China, the region's largest economy," the World Bank said. "[Economic] activity in the rest of the region is expected to peak in 2018 and remain steady around its potential rate in 2019 and 2020. The outlook is predicated on broadly stable commodity prices in the next two years, solid but moderating global demand, and a gradual tightening of global financing conditions."
Possible trade retaliation between the US and China, faster-than-expected tightening of global financing conditions and associated financing stress, as well as elevated domestic debt and large external financing needs in some countries are downside risks for regional economies going forward.
Corporate debt -- and, in some countries, foreign currency debt -- has grown rapidly since the global financial crisis, raising vulnerability to rising borrowing costs.
"Policymakers in emerging market and developing economies need to be prepared to cope with possible bouts of financial market volatility as advanced-economy monetary policy normalisation gets into high gear," said Ayhan Kose, director of the World Bank's development prospects group.
"Rising debt levels make countries more vulnerable to higher interest rates," he said.
