Thai central bank ups 2012 GDP growth projection to 6% year-on-year

The Bank of Thailand (BoT) revised its 2012 Gross Domestic Product (GDP) growth forecast to six percent year-on-year thanks to post-flood economic recovery, faster than previously anticipated, and the government’s financial measures.
BOT Assistant Governor Paiboon Kittisrikangwan told a press briefing that the Thai economic growth projection for 2012 has been revised upward to six percent from 5.7 percent and 4.9 percent as projected in March and January respectively.
Post-flood recovery in manufacturing has been robust, as businesses begin resuming production to meet domestic and global demand, the BOT’s Monetary Policy Committee (MPC) said in its May 2012 issue of the Inflation Report, released on Friday.
The MPC believed that manufacturing production would return to normal late in this year’s Q2.
Private investment is poised to outpace the previous forecast and return to normal conditions in Q1. The pick-up was mainly due to machinery and equipment investment.
Government’s policies and measures will be crucial in sustaining strong momentum in both consumption and investment over the period ahead, said the BOT report.
The central bank projected that the Thai economy in 2013 will continue expanding, driven by a surge in exports and will grow by 5.8 percent.
The BoT raised its headline inflation projection in 2012 to 3.5 percent year-on-year from the earlier projection of 3.2 percent in January.
In an overall picture of 2012-2013 inflation, inflationary pressure was caused by rising production costs resulting from high Dubai crude oil prices. Economic recovery will also contribute to rising inflation.
The government’s measures to control goods prices will help curb inflation temporarily, but consumer prices will finally increase due to impacts from higher oil prices and higher wages on production costs.
Domestic factors needing to be monitored in implementing monetary policies are the pass-through from cost burden, possible increased consumer goods prices, affected by higher production costs, psychological effects of inflation on consumer confidence, measures to oversee consumer prices such as fares and energy prices and the adjustment of operators to handle higher production costs. (MCOT)
 

Flood-affected SME operators resume production: Industry Ministry

All of Thailand registered Small and Medium-Size Enterprises (SMEs) forced to suspend production by last year’s flood have resumed operation, according to Industry Minister Pongsvas Svasti.
All 5,664 business operators, including about 3,000 SMEs in 34 provinces, registered to seek help from the government’s post-flood rehabilitation project. About Bt148 million was set aside to run the project from March to July.
The Department of Industrial Promotion was assigned to work with educational institutions, advising companies, and financial institutions to provide help to these flood-affected operators in the first phase including inspection and machinery repairs.
The project now is proceeding to in-depth rehabilitation to look into all business administration systems from production to marketing processes to be prepared for risk factors and more competition ahead of the establishment of the ASEAN Economic Community (AEC) in 2015.
About 1,000 operators are subject to undergo these rehabilitation procedures. So far, 40 percent have been completed and the program will be finished by this July.
The industry Ministry planned to increase the number of advisors to support more than two million SMEs and to set up centers in neighboring countries to conduct marketing studies there.
The ministry policy is to develop Thai industry at all levels, particularly SMEs. In the short term, Thai SMEs are facing risks such as higher production costs as labor, transportation, raw materials and rising energy costs. Thai operators must be well prepared to handle any obstacles to run their businesses strongly and solidly, the minister said. (MCOT)