Thailand’s GDP forecast lowered to 3.7% for this year


The Finance Ministry has adjusted Thailand’s gross domestic product (GDP) for this year from 4 per cent to 3.7 per cent and predicted 5.1 per cent growth next year thanks to the Bt2 trillion investment on infrastructure development.

Somchai Sujjapongse, director of the Fiscal Policy Office, said this year’s GDP would not reach 4 per cent unless the government speeds up the 2014 budget spending.

He predicted a delay in investment budget for next year pending a decision by the Constitution Court regarding implementation of the 2014 budget.

A budget of Bt86 billion from the total Bt600 billion must be injected into the system before the end of this year, he said, adding that the government has yet to spend Bt7 billion in financial incentives to state officials for 2011 and 2012; Bt2.5 billion budget for official workshops and seminars to be held in secondary tourist attraction provinces; and spending for road repairs.

He said the targeted 4 per cent GDP was based on an assumption of export growth at 1.8 per cent, or US$20 billion per month.

The GDP of Thailand’s 14 trading partners expanded by 3.3 per cent while the short-term interest rate set by the Monetary Policy Committee would be fixed at 2.5 per cent until next year.

Inflation is at 2.3 per cent and Dubai oil price is at US$109 per barrel.

Mr Somchai said the economic assessment for this year does not include impact from flooding in 25 provinces.

The Finance Ministry predicted next year’s GDP growth at 5.1 per cent, within a possible range of 4.6-5.6 per cent, thanks to strengthening economy among trading partners and an estimated spending of Bt60 billion on infrastructure development.