KResearch: GDP to grow by 1% in Q1

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BANGKOK, 23 March 2012  – The Kasikorn Research Center (KResearch) has estimated that the first quarter economic figures this year will grow by only 1% as many industries have not fully recovered from the flood devastation last year. 

The center believes the economy will improve in the second quarter, as a result of various government’s stimulus measures. It expects the economy to bounce back by the second half of the year and the overall GDP this year to grow by 5%, with the annual inflation rate hovering at 3.9%.

However, The KResearch voiced concern that the rising oil prices and the 300 minimum wage enforcement in April will push the living cost up, adding that if the European debt crisis worsens, the Thai economy could grow by only 1.8%. And if the crisis in the Middle East develops into all out confrontation between Iran and Israel or the US, the Thai GDP could shrink by 5.50%, but the center believes that this event is unlikely to happen.

It has also predicted that the policy interest rates this year will stabilize at around 3% until the third quarter and will be adjusted upward by the fourth quarter, in response to the inflation.

According to the KResearch, the baht is expected to be traded around 29.50-32.50 baht against the US dollar.