Bangkok Bank: Thai economy starts U-shape recovery

BANGKOK, 3 September 2009 (NNT) – Bangkok Bank has estimated that in the last quarter, the country’s economy will start a U-curve recovery mainly resulting from increasing public investments.

Executive Vice President and Director of Research Department, Bangkok Bank, Dr. Piyaphan Thayanithi revealed the estimation of the country’s expanding economy saying even though the economy in the current quarter contracted to 2.8-3.6% (yoy), it would grow in the fourth quarter and continue to increase by 2.0-4.0 % (yoy) next year.

He reasoned that the public investments which are expected to rise by 6-10% (yoy) next year would be the main driving force. Other factors contributed to the growth included the recovery of private consumption, private investment and export volume which is expected to grow up by 0.5-2.5%, 3.0-8.5% and 5.2-10.2% respectively.

With the recovery of domestic demand and the export industry combined with the global surge of oil and consumer product prices the import volume was expected to expand by 16.3-22.9% in 2010. The higher development brought about the 2.1-3.3 billion USD drop of favorable balance of trade and 3.2-4.0% billion USD drop of current account surplus.

There are still several factors, both positive and negative which are affecting the upcoming year’s economy. The positive factors included the upturn of important industrial product productions, mounting employment, expanding personal cash of financial institutions both for home mortgage and credit card and constant public investments.

The negative signs influencing the economy comprised the unpredictable resurgence of powerful countries’ economy, the slow recovery of some industrial product productions, risk of foreign capital inflow, soaring imports of capital goods and raw materials, overall low level of interest rate, ambiguous trend of private sector investment, declining revenue and numbers of tourists and the slow recovery of rice prices.

Dr. Piyaphan also added that the uncertainties of oil prices and natural disasters would be the other main factors impacting the country’s economy next year.