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.