Central Bank Of Thailand - Growth Will Now Be 3.8

[Furbie]

I would like to see how the people with blinders on respond today. The Central Bank of Thailand has again revised growth figures downward, and the previous example of car manufacturing used to show how well the economy is doing has also declined year on year.

Are the blinders still on…or can we now turn to conversations about what needs to be done to reverse the situation?

Foreign investors want more clarity

Foreign investors are waiting for the general election and clearer regulations on capital movements before making any decision to return, Lee Guan Liu, senior vice president of Standard Chartered Bank (Thai), said yesterday.

"Overseas investors are quite concerned about the 30-per-cent reserve-requirement measure, in particular the uncertainty of the rule. Once it was announced, it was revoked [in part], and that impacted their business operations. But they hope the central bank is finding a way out for this," he said.

The bank recently took a road show to Hong Kong and Singapore to brief investors there about the current investment environment in the Kingdom.

They still expressed confidence in the economy's fundamentals and believe it has good growth potential. But the political uncertainties and the Bank of Thailand's capital control measures raise red flags, he said.

Usara Wilaipich, the bank's senior economist, said foreigners hoped the 30-per-cent withholding measure might be revoked at an appropriate time. One positive sign is that the stronger baht did not hold back the country's exports in the first quarter. The central bank's monetary policy is expected to help relieve the problem.

The bank now predicts gross domestic product will grow 3.8 per cent this year, down from an earlier projection of 4.4 per cent. Although the economy is quite strong, it is short on confidence. Once the general election is held, that factor is expected to improve.

Meanwhile, the Federation of Thai Industries' Auto Club reported that 293,635 vehicles were manufactured last quarter, down 3.54 per cent year on year.

Of that total, 153,296 units, or 52.21 per cent, were for export, up 8 per cent year on year, while 140,339 units were for the domestic market, down 13.63 per cent year on year.

In the first quarter, exports of spare auto parts totalled Bt22.89 billion, up 5.06 per cent year on year.

Somruedi Banchongduang

The Nation, 27 April 2007