Thai economy projected to grow by 5-6 per cent in 2010

BANGKOK, June 29 (TNA) – The Thai economy this year is likely to rise 5.5 per cent with a projected range of 5.0-6.0 year-on-year, higher than projected in March when it was seen at 4.5 per cent year-on-year, Fiscal Policy Office director-general Sathit Rangkasiri said.

Factors that supported Thai economy in the first quarter of this year expanded 12 per cent. The recovery of the global economy, particularly Thailand’s new trade partner countries in Asia, also helped increase exports so far this year.

This year’s domestic spending — including private consumption and investment –are likely to recover from last year, Mr Sathit said.

Finance Ministry spokesman Ekniti Nitithanprapas said that exports and service volume in 2010 was projected to grow by 11.9 per cent due to the higher-than-expected economic recovery of trading partners.

Domestic spending in 2010 is likely to improve from last year. Private consumption, which contracted by 1.1 per cent last year, is expected to increase by 3.6 per cent this year despite the recent political turmoil due to better employment, higher farmer incomes and the government’s farmer income guarantee measures.

Private investment in 2010 is expected to grow 10.2 per cent per year owing to more orders after shrinking 12.8 per cent year-on-year.

Government spending has played an important role in supporting the Thai economy this year.

The speedy budget disbursement before the end of the year, particularly for the government’s economic stimulus packages is expected to expand state investment and consumption in 2010 by 5.1 and 6.1 per cent respectively.

Headline inflation in 2010 is projected to rise to 3.5 per cent with a projected range of 3.0-4.0 per cent in accordance with higher oil prices.

However, the government’s extension of measures to help low income earners will help reduce inflation. The current account surplus in 2010 is expected to drop to 2.7 per cent of the Gross Domestic Product (GDP)
resulting from higher import value expected to rise to 36.6 per cent, while export value is likely to grow by 22.5 per cent. (TNA)