World Bank paints improved economic future for Thailand


BANGKOK, Dec 19 – The World Bank (WB) has adjusted Thailand’s economic growth this year from 4.5 per cent to 4.7 per cent and positively forecast a 5 per cent expansion next year, according to a senior economist.

Kirida Bhaopichitr, a WB senior economist for East Asia and Pacific, said increased household consumption and investment after last year’s massive floods in Thailand, the government’s stimulation of consumer purchases and the successive inflow of foreign funds have contributed to the economic growth despite the country’s declining exports from 9.5 per cent last year to only 3 per cent this year due to the global economic slowdown and crisis in Europe and the US.

Thailand’s economic growth next year is predicted at 5 per cent thanks to revitalisation in the economic sector and the global economy, she said, adding that Thailand’s exports should expand to 5.5 per cent next year while investments in the private and public sections should increase by 8 per cent and 15 per cent respectively.

Consumption in the private sector should expand by 3.6 per cent and the public sector by 3 per cent, said Dr Kirida.

She pointed out that continuous domestic investments are mainly from the Bt60 billion water management project, tax refunds for first-car owners, and higher domestic consumption.

Inflation will expand within 3 per cent while the forecast interest rate for next year will be 2.75 per cent, similar to this year’s.

The WB economist said the European economic crisis, domestic political uncertainty and the nationwide minimum wage implementation remain the risk factors for the Thai economy and exports, while the government’s  rice pledging scheme is impacting Thailand’s competitiveness in theglobal market.