Thai Premier Bullish On Economy

Thai premier bullish on economy

BANGKOK - Thai Prime Minister Thaksin Shinawatra gave his country's roaring economy rave reviews Monday and said he is unperturbed by suggestions it could overheat if not managed properly.

"There will be no economic bubble situation," Thaksin assured in a speech to business executives, adding that he was sticking to his 2004 forecast of 8% GDP growth and a whopping 10% for 2005.

Thailand's economy has charged ahead this year to become Southeast Asia's top economic performer and is poised to continue its dizzying comeback from the 1997 financial crisis in the year ahead, despite some signs of overheating.

"Our macro-economic fundamentals are good, our economy will be good," Thaksin said. "We are taking care of all economic figures, the balance sheet, high growth and low inflation."

He said surging exports have yielded a current account surplus while reserves are at stable levels. "We have even paid back our IMF debt," he said.

The government made its final repayment on debt to the International Monetary Fund (IMF) this July, two years ahead of schedule.

After the Asian regional crisis hit, the fund stepped in to bail out Thailand with a financial package worth $14.5 billion and it eventually drew down $12.9 billion from the IMF.

Thaksin predicted next year's GDP would top 5.9 trillion baht. "The government also plans to balance the budget for 2005, about three or four years earlier than we had planned."

He predicted that tourism, one of the country's biggest foreign currency earners, would double in the next five years.

Thailand's economy has shown robust signs of recovery over the last 18 months, according to international ratings agency Fitch.

Domestic demand is soaring, private investment is picking up, bank credit growth to the private sector has turned positive and low inflation has continued, said Fitch's Hong Kong-based senior director Brian Coulton.

Thaksin's economic management and the political stability that has come with his control over parliament has also boosted investor confidence despite initial doubts over his government's commitment to financial reforms.

A downside to the economy's bounceback has been fears that a roaring property market and stock exchange have rallied too strongly from their poor standing during the crisis years, Sompop Manarangsan of Bangkok's Chulalongkorn University.

--AFP 2003-12-22