The Bank of Thailand downgraded its growth projections citing weaker exports and spending amid a sharp slowdown in China.
The Monetary Policy Committee lowered its growth projection for 2015 to 2.7 percent from 3 percent. The 2016 outlook was trimmed to 3.7 percent from 4.1 percent.
The bank said downside risks to outlook include a sharper slowdown in the Chinese and Asian economies, decrease in the number of tourists aftermath the bombings in Bangkok and lower-than-expected crowding-in effects of public investment.
The impact of the mid-year drought on the overall economy as well as the decline in global oil prices also influenced the action, the bank said.
The committee revised down the projection of headline and core inflation on the back of decline in oil and commodity prices and softening domestic demand pressure.
As a result, headline inflation is projected to turn positive later than previously expected. Consumer prices are forecast to fall 0.9 percent this year, instead of 0.5 percent drop estimated in June.
Headline inflation forecast for 2016 was reduced to 1.2 percent from 1.6 percent.
Core inflation is estimated to be at 1 percent this year, unchanged from prior forecast. The 2016 core rate was trimmed to 0.8 percent from 1 percent.
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