BANGKOK, 22 August 2011 – The National Economic and Social Development Board (NESDB) has reduced the 2011 Gross Domestic Product (GDP) growth projection to 3.5-4.0% due to the oil price and global economic situation.
According to NESDB Secretary-General Akom Termpittayapaisit, the Thai economic growth for the second quarter this year is at 3.2%, and the figure for the whole year so far is expected only at 2.9% owing to several negative factors such as declining household consumption and private investment.
The NESDB has reduced economic projection this year to 3.5-4% after it was earlier estimated at 3.5-4.5% in May 2011 while maximum inflation has been increased from the earlier target of 3.8% to 4% due to expected rising oil prices and delayed budget disbursement of the public sector.
Other negative factors are risks from the global economy as the US is experiencing economic slowdown while the EU is battling with debt crisis, especially Spain and Italy which might face debt problems after Greece. Meanwhile, the Thai baht tends to appreciate as the US dollar is weakening.
An increase of 0.2% in the inflation rate projection has not yet been included in the new government’s policy, the same as the plans to increase salary of government officials to 15,000 baht and daily minimum wage to 300 baht.
However, the new government also has policies to increase income and reduce expenses for people such as the policy to reduce corporate income tax from 30% to 23%, and promotion of skill training for labourers. These will help boost potential of entrepreneurs.