Economy likely to grow 3-5% next year, says BoT

Wednesday, 05 January 2011 From Issue Vol. XIX No. 1

The Thai economy is likely to grow 3-5 percent next year given the continued economic growth in November and the fourth quarter of this year, according to the Bank of Thailand (BoT).

Mathee Supapongse, senior director of BoT’s Domestic Economy Department, said Thailand’s improved economic growth will make the economy expand 7.3-8 percent as expected for this year.

However, the Thai economy still faces such risk factors as US economic uncertainties, the public debt crisis in Europe, and local political woes in a run-up to the general election next year.

He said the continued rise in the policy interest rate did not obstruct the economic expansion since the rate is still not high, although it was raised by 25 basis points at the latest meeting of the Monetary Policy Committee (MPC) in December.

Still, he conceded the higher interest rate had fueled the cost of doing business. The issue would be raised for consideration at the next meeting of MPC.

He revealed foreign capital had flown into Thailand in an amount of US$443 million in November, which was seen increasing at a slower pace because foreign investors adjusted their bond and securities investment portfolios for profit-taking.

Mathee said the private investment expanded 15.5 percent year on year in November. The business confidence index edged up to 52.5 from 50 points in October. The index in the three months ahead also rose to 55.2 from 54.6 points, but entrepreneurs remain concerned about economic and political uncertainties, higher production costs, and product price hikes because they are considered risk factors to an investment.

He said the overall economy is stable as the inflation rate stayed at 1.1 percent, the current account balance remains in surplus, and the international reserve is still high. (MCOT online news)

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