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Economy likely to grow at least 7%, says FPO

BANGKOK: -- The Thai economy is expected to grow at least 7 per cent, higher than the 5-6 per cent projected earlier this year given the better-than-expected economic growth in the first half of the year, according to the Fiscal Policy Office (FPO).

FPO Director-General Satit Rungkasiri revealed the economic expansion of 10.6 per cent in the first half of 2010, particularly the growth of 9.1 per cent in the second quarter of the year, is higher than forecast earlier by the office at 8 per cent.

Although the economy has signaled a slowdown in the second half of the year, FPO believes it will grow at least 5 per cent in that period. Because of this, it is like the economy for the whole year will expand no less than 7 per cent.

He said FPO would revise its economic growth estimate on September 29.

Mr Satit said the economy in July continued growing, boosted by local spending growth as could be witnessed by higher value-added tax collection, rising imports of consumer products, and a higher consumer confidence index.

On the continued strengthening of the baht at present, he said FPO expected the currency would appreciate to stay around 32.1 to the US dollar.

The baht had strengthened in the same direction with other currencies in the region. Should the Bank of Thailand remain able to supervise the baht to ensure it moves in parallel with other currencies of Thailand’s trade rivals, FPO believed the country’s exports would not be adversely affected.

Regarding the BoT’s signal that the interest rate is on the upward trend, Mr. Sathit said he believed the central bank was well aware that the policy interest rate hike would impact the recovery of the local consumption sector.

So, FPO saw no need to warn the central bank to be careful in its implementation of the interest rate policy, he said. (MCOT onlinenews)

-- TNA 2010-08-31