Reconstruction of flood-damaged areas and substantial
policy stimulus will drive a rebound in Thailand’s economic growth in 2012,
said the Asian Development Bank (ADB).
The ADB projected Thai economy to recover from last
year’s marginal 0.1 percent to 5.5 percent this year, said Dr Luxmon
Attapich, the ADB’s senior economist.
Thailand’s economic growth of 5.5 percent was revised
from the institution’s earlier projection of 4.5 percent.
The anticipated rebound in growth this year depends on
the government reconstructing flood-damaged infrastructure and making a
significant start on long-term projects involving flood-prevention and water
management.
It is reflected in improvement of economic figures in
January and February, particularly confidence among consumers and
businesspeople.
Private consumption growth was underpinned by civil
service salary increases in January and a 40 percent boost in the minimum
wage in April. The government has also introduced incentives for first-time
buyers of houses (tax breaks) and automobiles (cash rebates).
Inflation is forecast to average 3.4 percent in 2012 and
3.3 percent in 2013.
Ms Luxmon said risks to the outlook include a deeper than
assumed recession in the eurozone - the market for nearly 10 percent of Thai
exports and source of about 27 percent of its tourists. Higher than
projected global oil prices are also a downside risk. Flooding and drought
are a perennial threat.
“Thailand’s ability to restore confidence among investors
still depends on upgrading infrastructure to handle with possible floods and
reviving industrial plants as well as implementing long-term comprehensive
water management. These are urgent issues to help boost the Thai economy in
these two years,” the ADB senior economist said. (MCOT)
