The University of Thai Chamber of Commerce (UTCC) will revise downward its forecast of the country’s economic growth this year from the previous prediction of 3.1 per cent, due to a number of emerging negative factors, Centre of Economic and Business Forecasting director Thanavath Phonvichai said on Friday.

UTCC will also lower export growth forecast from 1.8 per cent for this year, he added.

The drought is expected to cause an economic contraction of 0.03 per cent, totalling eight to 10 billion baht ($260 million to $330 million).

An escalation of the US-Iran conflict could spike crude price to between $75-80 per barrel from around $65 per barrel, he said. A price hike of one baht per litre in all fuel types would mean that Thai consumers will have to shoulder an additional living cost of 2.1 billion baht monthly.

Regarding the strengthening baht, he said its appropriate value should be 31 baht per US dollar.

Last week, Thai National Shippers’ Council chairwoman Ghanyapad Tantipipatpong said the council expected zero or one per cent growth in Thai exports this year from last year.

The forecast was based on the assumption of the average baht value at 30.5 per US dollar. The baht was at 30.25 per US dollar as of Sunday.

If the Thai currency strengthens beyond that level, exports this year may contract by five per cent, she said.

THE NATION (THAILAND)/ASIA NEWS NETWORK