Thailand Revised Growth Forecast To 3.8-4.8 Per Cent

[george]

Thailand revised growth forecast to 3.8-4.8 per cent

BANGKOK: -- The Bank of Thailand Tuesday revised downward the country’s economic growth forecast from the range of 4-5 per cent to 3.8-4.8 per cent as consumption and investment activities contracted more severely than previously expected.

Announcing the revised growth forecast for the Thai economy this year, Mr Methi Supapong, director of the Bank of Thailand’s Monetary Policy Division said the revised forecast is also attributed to the fact that the Thai economy slowed down well into the first two months of this year.

Investor and consumer confidence remains fragile due to uncertainties and any recovery from this sluggish pace may take longer than expected.

In any case, the Bank of Thailand anticipates that the pace of growth would pick up by the fourth quarter of 2007 because the general election promised by this interim government will reinstate certainty, thereby kicking off spending by the private sector.

The central bank is optimistic that following the election, real investment will pick up during the first quarter of next year, with post-election certainty amidst low inflation and interest rates climate. That, said Mr Methi, would result in growth forecast of 4.3-5.8 per cent next year, 0.3 per cent higher than the previous forecast of 4.5-5 per cent.

The Bank of Thailand expects headline inflation to hover at the range of 1.5-2.5 per cent through 2007, while core inflation is likely to stay between 1-2 per cent this year and next, in line with the target. However, headline inflation is likely to climb up to 2-2.5 per cent due to rising global oil price.

Thailand’s export should expand well, with the overall export value this year projected to grow between 9-12 per cent, higher than the previous forecast of 7.5-10.5 per cent, thanks to brighter economic prospects among Thailand’s key trading partners.

The Thai currency, the central bank believes, is likely to continue its appreciation trend against the greenback as the US dollar weakens in response to its economy.

--TNA 2007-04-24