Bot,Economy likely to grow 3-5% next year

BANGKOK, Dec 31 – The Thai economy is likely to grow 3-5 per cent next year given the continued economic growth in November and the fourth quarter of this year, according to the Bank of Thailand (BoT).

Mathee Supapongse, senior director of BoT’s Domestic Economy Department, said Thailand’s improved economic growth will make the economy expand 7.3-8 per cent as expected for this year.

However, the Thai economy still faced such risk factors as the US economic uncertainties, public debt crisis in Europe, and local political woes in a run-up to the general election next year.

He said the continued rise in the policy interest rate did not obstruct the economic expansion since the rate is still not high although it was raised by 25 basis points at the latest meeting of the Monetary Policy Committee (MPC) in December.

Still, he conceded the higher interest rate had fueled the cost of doing business. The issue would be raised for consideration at the next meeting of MPC.

He revealed foreign capital had flown into Thailand in an amount of US$443 million in November, which was seen increasing at a slower pace because foreign investors adjusted their bond and securities investment portfolios for profit-taking.

Mr Mathee said the private investment expanded 15.5 per cent year on year in November. The business confidence index edged up to 52.5 from 50 points in October. The index in the three months ahead also rose to 55.2 from 54.6 points, but entrepreneurs remain concerned about economic and political uncertainties, higher production costs, and product price hikes because they are considered risk factors to an investment.

He said the overall economy is stable as the inflation rate stayed at 1.1 per cent, the current account balance remained in surplus, and the international reserve was still high.