Thai Economy: B O T Raises 2013, '14 Growth Forecasts

[webfact]

ECONOMY
BOT raises 2013, '14 growth forecasts
The Nation


Investment in infrastructure projects is a key factor to boost the economy.

BANGKOK: -- The BOT's new forecast is close to the International Monetary Fund's 5.5-per-cent projection for Asean-5, which covers Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

The Bank of Thailand has offered a reason for Thais to greet the traditional New Year with continued optimism, by raising its economic-growth forecasts for 2013 and 2014 despite a slowdown in the export sector.

The 2013 projection for growth in gross domestic product was raised from 4.9 per cent to 5.1 per cent, and the 2014 projection from 4.8 per cent to 5 per cent.

Higher public investment, particularly the Bt2-trillion infrastructure plan, funding for which is likely to be disbursed in the final quarter of this year, is highlighted as the main reason for the higher estimate of economic growth, said Paiboon Kittisrikangwan, assistant governor of the Bank of Thailand and secretary of its Monetary Policy Committee (MPC).

Downside risks, however, are the fragile global economic recovery and rising household debts, as well as spikes in Thai shares and property prices that show the incipient signs of financial imbalances.

"Though the global economy has improved in terms of stability, it remains fragile and continues to be the major source of risks for Thailand's growth," Paiboon said.

The 18.9-per-cent GDP expansion in the final quarter of last year, pushing 2012 growth to 6.4 per cent, was hailed as the main reason for the adjustment. While the National Economic and Social Development Board maintains its forecast of 4.5-5.5 per cent for 2013, the Fiscal Policy Office recently raised this year's projection from 5 per cent to 5.3 per cent.

Regionally, the World Bank forecasts 6.2-per-cent growth for the Indonesian economy, while economists expect Malaysia to show growth of 5.3-5.5 per cent this year and the Philippines 6.4 per cent. An HSBC economist earlier said Thailand's GDP could expand by more than 6 per cent.

The BOT's new forecast is close to the International Monetary Fund's 5.5-per-cent projection for Asean-5, which covers Indonesia, Malaysia, the Philippines, Thailand and Vietnam, and 5.7 per cent for 2014. It well surpasses the global projection of 3.4 per cent, lowered from the 3.5 per cent projected in October chiefly because the United States is expected to expand by only 1.7 per cent this year because of fiscal-budget tightening.

The IMF said growth in emerging markets and developing economies was on track to build to 5.5 per cent this year. While a few economies in Latin America are "slipping into crisis-like conditions", the IMF expected the euro zone to contract by 0.2 per cent.

As global demand for Thai exports will remain weak, the MPC admitted that Thailand's export recovery would continue to be gradual. Merchandise exports might turn out weaker than expected in the first quarter, but should improve in the second half in line with recovery in trading partners' economies and leading indicators of exports.

However, growth will be spurred partly by higher budgetary spending as well as the Bt2-trillion investment plans, it said.

"Fiscal impetus is also expected to increase, both from higher budgetary spending and the Bt2-trillion infrastructure investment plan that has become more concrete and is likely to be disbursed in the last quarter of 2013, earlier than assessed in the last report," Paiboon said. "This higher public investment should offset the moderating momentum of private demand early this year.

"Over the projection period, the MPC expects downside risks from the global economy to persist, but upside risks also increase given the possibility of faster disbursement of infrastructure investment outlay compared with the baseline scenario. The fan chart for growth is thus balanced, compared with the previous one that was downward-skewed," he said.

Meanwhile, inflation in both years is expected to remain stable and close to the previous forecasts, but with risks tilted slightly to the upside. With growing demand and tightening resource constraints especially in the labour market, the pass-through of costs may be higher than in the past. Inflation fan charts are thus slightly upward-skewed, compared with the previous ones that were balanced.

The forecast for headline inflation is lowered slightly from 2.8 per cent to 2.7 per cent and core inflation from 1.7 per cent to 1.6 per cent. Forecasts for next year are slightly higher, however, up from 2.6 per cent to 2.7 per cent and from 1.6 per cent to 1.7 per cent.

"Amid current economic expansion, incipient signs of financial imbalances are also present," Paiboon said. "Rising household debt might add more fragility to the household sector, while risk-taking in the stock and real-estate markets has also increased. These developments continue to warrant close monitoring."

Higher growth forecasts warrant more inflows to the country, which would further strengthen the dollar/baht exchange rate. The baht has gained more than 5 per cent against the US dollar so far this year, breaching the 29-per-dollar level for the first time since 1997, on the back of more than $10 billion worth of purchases of Thai bonds.


-- The Nation 2013-04-13

[Naam]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

[thenervoussurgeon]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

And we all know that you Naam are the only expert on thai visa ,dont we boys and girls?

[Naam]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

And we all know that you Naam are the only expert on thai visa ,dont we boys and girls?

ladies and gentlemen, here we go. the first expert remark on Thai economy. keep it coming to amuse me. it's a boring weekend and the markets are closed.

[Payboy]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

I'm not an "expert", but I could be a "cum guru".

[thenervoussurgeon]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

And we all know that you Naam are the only expert on thai visa ,dont we boys and girls?

ladies and gentlemen, here we go. the first expert remark on Thai economy. keep it coming to amuse me. it's a boring weekend and the markets are closed.

I am no hexpert Naam ,i think the baht will stay high ,i am just gently taking the "p" as we know you tend to know everything

[Naam]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

And we all know that you Naam are the only expert on thai visa ,dont we boys and girls?

ladies and gentlemen, here we go. the first expert remark on Thai economy. keep it coming to amuse me. it's a boring weekend and the markets are closed.

I am no hexpert Naam ,i think the baht will stay high ,i am just gently taking the "p" as we know you tend to know everything

another expert remarks concerning the Thai economy.

[Mudcrab]

As global demand for Thai exports will remain weak, the MPC admitted that Thailand's export recovery would continue to be gradual. Merchandise exports might turn out weaker than expected in the first quarter

not rice apparently

[Mudcrab]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

I'm not an "expert", but I could be a "cum guru".

giver or taker? LOL sorry Payboy but sometimes I just can't help myself

[Naam]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.

I'm not an "expert", but I could be a "cum guru".

[Payboy]

the Bank of Thailand is as usually wrong with its published estimates. several dozen resident Thaivisa experts cum gurus who agree unanimously that Thailand's economy is doomed and that the Baht will fall into an abyss are overwhelming evidence for my claim.I'm not an "expert", but I could be a "cum guru". giver or taker? LOL sorry Payboy but sometimes I just can't help myself

Real Guru's always give selflessly.