Thai economy likely to grow 4.5% despite political riot: FPO

BANGKOK, May 27 (TNA) – The Thai economy is likely to grow 4.5 per cent this year although it had been adversely affected by the mass political rally, which ended with a riot and looting in the center of the capital last week, according to the Fiscal Policy Office (FPO).

FPO Director-General Satit Rungkasiri said the recent political violence would probably reduce the number of foreign tourists expected to visit Thailand this year from 15.8 million to 14.1 million, almost equal to the number recorded last year. It could make the country lose Bt52 billion in revenue from tourism.

The turmoil had inflicted Bt33 billion in damages to the consumer sector in the past 74 days.

The investment is expected to be impacted by 10 per cent in the second quarter of this year and by 5 per cent in the third quarter, which could incur around Bt60 billion in damages.

The damages, if combined, would reach Bt145 billion or 1.45 per cent of the country’s gross domestic product (GDP), which could reduce the expected economic growth this year by 1.1 per cent.

Even so, he said, the Finance Ministry still maintained its GDP growth estimate at 4.5 per cent since it projected earlier the economy would expand up to 5-6 per cent this year.

However, on June 29 the FPO is expected to announce a revised economic growth projection.

Mr Satit said the country’s economy still looked favourable with hefty growth of 12 per cent in the first quarter. Exports in April surged 35.2 per cent, boosted by the global economic recovery.

In particular, exports to other Asian countries including China enjoyed a better-than-expected growth.

With the impressive export growth, he said, the overall economy could sustain its growth if the government managed to accelerate investment in projects under the Thai Khem Keng (strong Thailand) scheme, disbursement of the 2011 budget, and implementation of measures to rehabilitate people affected by the riot. (TNA)