Thailand’s economy up, but exports down

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BANGKOK, March 29 – Thailand’s economy has continued to expand through February, but exports shrank for the first time in six months, the director of the Fiscal Policy Office said today.

Somchai Sajjapong said domestic manufacturing, particularly in the industrial and agro industrial sectors, has slowed down while tourism enjoys a steady growth.

He said Thailand should achieve a 5.3 per cent economic growth this year, slightly up from the previous forecast of 5 per cent, mainly thanks to a higher trend in domestic demand, consequently from increasing household income, positive employment rate, the adjustment of the daily minimum wage to Bt300 and the government’s rice pledging scheme.

Consumption in the public sector has climbed based on the overall 2013 budget spending while domestic investment will contribute to economic expansion this year, Mr Somchai said.

He added that investment in the private sector is expected to be higher than last year’s volume due to the government’s stimulus package after the massive floods in 2011 and investment promotional measures.

External demand will drive up Thailand’s exports, forecast to expand by 9 per cent this year – in line with the global economic recovery, he pointed out.

Thailand’s inflation will remain at 3 per cent and the country will enjoy a slight trade surplus compared to last year.

He said risk factors must be closely monitored regardless of the volatile Thai baht, economic recovery of trading partner countries, the United States public debt, the Eurozone progress in resolving its public debt problem, and the impact of drought on the agricultural sector and rural people’s income.