UTCC says government’s spending necessary for Thai economy

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BANGKOK, 7 January 2013 The University of the Thai Chamber of Commerce (UTCC) has pointed out that government’s spending is vital to driving Thai economy, adding that the Thai economy will grow 5 percent this year. 

UTCC’s Economic and Forecasting Centre Director Thanavath Phonvichai said the reason why stock and gold prices have been rising lately is that the overall economic situation has gotten better, thanks to the recovery of Europe from the chronic debt crisis and the US’s fiscal cliff policy.

Furthermore, he expects the Bank of Thailand to be able to take control over the Thai currency via its low interest policy to prevent massive capital flows, causing the Thai baht to appreciate against other currencies.

As for the government’s plan to invest over 500 billion baht in its infrastructure projects in 2013, the Director said the move would help boost the Thai economic growth.

Regarding the 300-baht minimum wage policy, which has taken effect since January 1st, Thanavath said the policy helps increase the purchasing power of the people, resulting in a 5-percent growth for the country’s economy.

Although the world economy has been recovering, it is still at risk of another crisis, said the Director. He has therefore urged the government to keep investing to prop up and trigger the overall economy.