The National Economic and Social Development Board warned the fragile recovery in the US economy would be a key threat to the Thai economic growth this year.
While maintaining the growth projection this year at 3.5-4.5 per cent, the economic think tank noted that uncertainties are looming. Aside from unstable figures in the US, debt crisis in some European countries as well as troubles in Japan could take toll on the Thai economy.
The think tank also revised up inflation forecast this year from 2.8-3.8 per cent to 3-3.8 per cent, on the revised assumption that crude oil would cost US$98-$107 per barrel. The previous crude oil assumption was $85-$95.
“A major constraint is the impact from Japan’s economic slowdown, particularly to the automotive and electronics industries,” said NESDB secretary general Arkom Thempittayapaisit.
He noted that the government this year should focus on strengthening individual income as well as stabilising goods prices. Meanwhile, once the economy returns to a more normal condition, it should emphasise on competitiveness and border as well as intra-regional trade.
The think tank expected extra money circulation of about Bt20-Bt30 billion during the election period, which should somewhat increase purchasing power.
The NESDB maintained its projection that the Thai economy this year was likely to grow by 3.54.5 per cent owing to the improved tourism sector and agricultural prices. Consumer confidence and investment remained good.
The Thai economy in the first quarter 2011 expanded by 3 per cent over the same period last year and 2 per cent from the previous quarter, due to growing exports, investor confidence and domestic consumption.
Goods exports valued in US dollars hit a record high of US$56 billion, a 27.4 per cent growth yearonyear. Exports in baht terms were valued at Bt1.7 trillion, a 18.6 per cent growth, resulting from the baht strengthening by 6.9 per cent compared to the same period last year.
Household spending grew by 3.4 per cent favoured by increased farm income and improved employment. The unemployment rate was 0.8 per cent and consumer confidence in the first quarter was 71.9, rising from 71.3 in the earlier quarter because consumers were confident in the improved economy, which has come about from both higher civil servant salaries and the minimum wage. However, consumers were more careful about spending due to increasing goods prices.
Source: The Nation