New economic stimulus package to boost economy in 2010-2012

BANGKOK, July 4 (TNA) – The government’s second phase economic stimulus measures under “Thai Khem Khang” or “Stronger Thai 2012” project will help boost the country’s annual economic growth of 1-2.5 per cent during 2010-2012, according to a leading securities analyst.

However, implementation of the measures will raise the public debt to 60 per cent of the gross domestic product (GDP) in 2012, according to Sukit Udomsiri, first executive vice president of Siam City Research Institute, at a special panel discussion on the economic and financial situation

He predicted the planned issuance of the government bonds to absorb the market liquidity would not adversely affect the overall liquidity in the system.

But liquidity is quite likely to tighten next year as the demand for investment funds by the private sector is set to increase as a result of recover in the global economy.

Under the circumstances, he said, the interest rate might to increase next year.

Mr. Sukit believed the Thai economy next year would not be worse than this year as the global economy is forecast to is forecast to enjoy the V-shape turnaround in 2011.

Still, he warned of the renewed rise in inflation in the coming August-October period, since global oil prices are expected to increase further. (TNA)