Thai economic growth forecast at 1.1% this year: Fiscal Policy Office

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BANGKOK, Dec 28 – Thailand’s economic forecast for the current year has contracted to grow by only 1.1 per cent this year, but is expected to rebound to grow 4.5-5.5 per cent next year, according to the Fiscal Policy Office (FPO).

Fiscal Policy Office (FPO) Director-General Somchai Sajjapongse said in his capacity as a spokesman of the Finance Ministry said that indicators of Thai economy in November showed obvious contraction resulting from the flood crisis and its impact on the industrial sector, and domestic spending and exports shrank significantly.

In November, exports dropped 12.4 per cent and exports of industrial goods fell 26.7 per cent. However, farming and agro-industrial goods exports continued to grow. Thai economic growth in the fourth quarter of this year is likely to contract as much as five per cent from the earlier forecast of a 2-3 per cent contraction.

This year, the economy grew 3.2 per cent, 2.7 per cent and 3.5 per cent in the first, second, and third quarters respectively.

At the beginning of the year, the Thai economy was projected to expand 4 per cent this year, but the forecast was revised down to 1.1 per cent. However, the figure is not the worst on recent record as the economy contracted 6.6 per cent in 2006 and 2.3 per cent in 2009.

In 2012, Mr Somchai said, the Thai economy is likely to grow within the range of 4.5-5.5 per cent from its low base this year as a result of the government’s measures to stimulate economy.

The FPO will monitor implementation of the measures and the funds that will be injected into the economy transparently. The Finance Ministry must have medium and long term financial strategic plans, he said. The ministry has been able to maintain fiscal discipline so far.