World Bank forecasts Thailand’s growth rate this year and next at 3.1 percent

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World Bank has adjusted up Thailand’s growth rate forecast this year to 3.1 percent from an earlier forecast of 2.5 percent, thanks to expansion in tourism sector, particularly increased tourist arrivals from China.

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Mr Kiatipong Ariyapratya, senior economist at World Bank’s regional office in Thailand, predicted that Thailand’s growth rate for next year was likely to remain the same at 3.1 percent.

He attributed the increased growth rate forecast tourism expansion, especially increased tourist arrivals from China for the first half of the year although the arrivals are likely to drop slightly for the second half of the year, as well as increased consumption of the private sector and government sector’s investments and expenditure.

He, however, noted that the export sector was expected to contract further from the earlier forecast of 0.9 percent.

Thai economy remains at risk from economic slowdown in China where growth rate next year is forecast at 6.5 percent instead of 6.7 percent which will impact on Thailand’s economy as China accounts for 12 percent of overall Thai exports and 8 percent of foreign direct investments, said Mr Kiatipong.

The World Bank’s senior economist also noted that political instability might pose another potential risk if people are not satisfied with the government’s reforms or if the reforms are indefinitely postponed.