BANGKOK, 9 June 2011 – The World Bank is expressing concern over several policies promised by political parties ahead of the general election in Thailand, saying they can lead to inflationary pressure once implemented.
World Bank Senior Economist for Thailand Office Kirida Bhaopichitr elaborated her concern that the policies to increase people’s income and invest in infrastructural projects will stimulate spending domestically and might trigger rising inflation in the country.
Ms Kirida believed, however, that a new government would remain in budgetary disciplines no matter which political party will come to the steering wheel. She noted that Thailand has always given importance to budget deficits and the public debt issue. If the new government permits such problems to arise, its image will be tarnished.
The economist suggested that specific target groups should be set for each policy aimed to assist people; otherwise, a vast amount of budget will be spent without directions. She raised as example the Village Fund which should focus on the grassroots.
Meanwhile, another World Bank Economist for Thailand Office, Mr Frederico Gil Sander, admitted that the inflation rate in Thailand tends to rise continuously since the government is gradually cancelling the policy to pin prices of consumer products and diesel. He said, however, the Bank of Thailand should be able to control the inflationary pressure.
The World Bank still maintains the Thai economic growth rate this year at 3.7% although the economy in the first quarter grew more than expected but slowing down in the second quarter following the twin disasters in Japan. According to the World Bank, Thailand will have to face several risk factors in the latter half this year, including rising energy prices, political stability after the election, the slowing down of Chinese economy and public debt crisis in Europe.