NESDB revises 2012 GDP upward to 5.5-6.5%


BANGKOK, Feb 20 – Thailand’s National Economic and Social Development Board (NESDB) on Monday revised its gross domestic product (GDP) forecast for 2012 upward to 5.5-6.5 per cent from previous forecast of 4.5-5.5 per cent.

NESDB Secretary-General Arkom Termpitayapaisit said 2012 GDP growth is likely to revive with driving force from resuming and speeding industrial production and the government’s investment in water management projects.

Meanwhile, he said last year’s flood crisis shrank the 2011 GDP to 0.1 per cent from the earlier projected 3.8 per cent.

Devastating floods caused GDP in the fourth quarter to shrink nine per cent with severe impacts on industrial production, consumption, investment, service sector and exports. Damage from the flooding impacted GDP by about Bt248 billion.

He said the World Bank expected that about Bt798 billion is needed for post-flood rehabilitation after the flood caused damage amounting to about Bt1.4 trillion.

Regarding seven industrial estates hit by flooding, 336 plants or about 44 per cent of the overall number, have resumed production, Mr Arkom said.

The rest–about 56 per cent of the plants–have not yet resumed production due to waiting for compensation of insurance claims, new machinery, and liquidity problems.  It is expected that all factories will be able to resume production. Investment and consumption are likely to expand 14.2 per cent and 4.4 per cent, respectively, while headline inflation this year is likely to stay within the range of 3.5-4 per cent.

Mr Arkom said export sector this year will rebound to grow at 17.2 per cent as trade partners in Asia still have the potential to grow.

Risk factors that should be closely monitored are natural disasters and the slowing global economy, in particular Europe’s debt crisis, volatile oil prices and currency exchange problems, as well as the shortage of skilled labour in some industries.