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Thai economy returns to growth in fourth quarter

BANGKOK, February 21, 2011 (AFP) - Thailand's economy returned to growth in the fourth quarter of 2010, snapping out of a brief recession on the back of solid exports and private consumption, official data showed Monday.

Gross domestic product (GDP) expanded 1.2 percent in the October-December period from the previous quarter, and by 3.8 percent compared with a year earlier, the government's economic planning agency reported.

For the whole of 2010, the economy grew 7.8 percent, it added.

The economy suffered two back-to-back quarterly contractions through September -- meeting the usual definition of a technical recession -- squeezed by a strong baht and a wobble in the global economy.

But economists have played down the relatively small contractions as a bump on the country's growth path rather than a severe downturn.

Growth is, however, expected to slow sharply in 2011 to within a range of 3.5 and 4.5 percent, said Arkhom Termpittayapaisith, secretary-general of the government's National Economic and Social Development Board.

The agency expects exports to increase 12.5 percent this year.

It lifted its inflation projection to a new range of 2.8-3.8 percent, from 2.5-3.5 percent previously.

Thailand's central bank in January raised interest rates to 2.25 percent -- the fourth increase in six months -- citing inflation risks and solid economic growth. Inflation hit 3.03 percent in January.

The GDP figures added to speculation that the Bank of Thailand may raise its benchmark rate by another quarter point, to 2.50 percent, when its monetary policymakers next meet on March 9.

The Thai economy remained relatively resilient in the face of violence in Bangkok in April and May of last year sparked by mass opposition street protests that paralysed the retail heart of the city and scared off tourists.

Arkhom said renewed demonstrations by Thailand's rival political factions, who have been back out on the streets of the capital in recent weeks, were not likely to have a significant impact on 2011 economic growth.

-- (c) Copyright AFP 2011-02-21

-- Dow Jones Newswires contributed to this story --

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Similar article on Bloomberg with a bit more info.

http://www.bloomberg.com/news/2011-02-21/thai-economy-expanded-1-2-in-fourth-quarter-of-2010-more-than-estimates.html

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Thailand's 2011 economic growth projected at 3.5-4.5%

BANGKOK, Feb 21 – Thailand's National Economic and Social Development Board (NESDB) forecast the Thai economy in 2011 to expand by 3.5-4.5 per cent, favoured by improving global economy which supports Thailand’s exports and tourism, Arkhom Termpittayapaisith, NESDB Secretary-General announced on Monday.

It is expected that the number of tourist arrivals to Thailand will reach 16.8-17 million, rising from the 15.8 million tourists recorded last year.

Although political demonstrations continue, foreigners understand the situation, so it has no significant impact on tourism, he said.

Consumer income is likely to increase from rising in income of civil servants, private company employees and farmers.

Financial institutions are stable and liquidity remains high which is expected to boost credit growth. Inflation expanded 2.8-3.8 per cent, higher than earlier projection at 2.5-3.5 per cent after higher goods prices.

The NESDB secretary-general said the GDP for the whole of 2010 grew 7.8 per cent, driven by growth in private investment by 13.8 per cent and in household spending by 4.8 per cent and in export and service by 14.7 per cent and in industrial sector by 13.9 per cent.

Meanwhile, Commerce Minister Pornthiva Nakasai said exports in January were valued at US$16.747 billion, an increase of 22.25 per cent and major export markets expanded by 23.4 per cent while exports to secondary or emerging markets has risen by 15.9 per cent. (MCOT online news)

-- TNA 2011-02-21