Finance Minister projects 2011 GDP to grow 4%


BANGKOK, Sept 28 – The Ministry of Finance projected that Thai economy in 2011 will grow four per cent and still be affected by flooding in 26 provinces and inflationary pressure with the inflation rate likely to stay around 3.8 per cent.

Boonchai Charassangsomboon, Executive Director of the Fiscal Police Office Macroeconomic Policy Bureau said the floods will cost the Thai economy about Bt20-40 billion or account for 0.2-0.3 per cent of the country’s Gross Domestic Product (GDP).

Uncertainty from global economic problems, the real estate crunch and a 9.1 per cent unemployment in the US may also impact Thai exports.

The Thai economy however is still driven by domestic demand, the minimum wage increase, and the government’s economic stimulus measures. The Dubai crude oil price is forecast to hover around US$101 per barrel and US$115 per barrel next year as the demand for oil is expected to rise.

The Fiscal Policy Office forecast that GDP in 2012 will grow 4.5 per cent and the inflation rate at 3.3 per cent as a result of implementing the government’s economic stimulus projects such as increasing the minimum wage and salaries of civil servants and expediting megaprojects to generate employment.

However, capital flow and debt problems in Europe and Japan must be closely monitored. The Thai government must stimulate the domestic economy and reduce dependence on exports as 24 trade partner economies have slowed down.