Bangkok--29 Mar--The Ministry of Finance of Thailand
The Ministry of Finance of Thailand announced that the Thai Economy in 2010 is expected to expand at 4.5 percent, or within a range of 4.0 to 5.0 percent per year, an improvement from the December 2009 forecast of 3.5 percent.
Mr. Satit Rungkasiri, the Director-General of the Fiscal Policy Office (FPO), gave details on Thailand’s economic projections as of March 2010 that the upward revision on Thailand’s Economic Projections for 2010 is due to improvements in export and private consumption sectors. Particularly, the faster-than expected economic recoveries of major trading partners, especially those in Asian region, has and will continue to contribute to the high growth in Thai exports of goods and services. Moreover, domestic spending in 2010 has a tendency to further expand from the low base last year. Thus the Thai economy is considered more balanced as its expansion is now driven by both internal and external drivers.
Mr. Ekniti Nitithanprapas, the Director of Macroeconomic Policy Bureau and the Spokesperson of the Ministry of Finance, added that export volume of goods and services in 2010 is forecasted to grow at 9.7 percent per year, from the contraction of -12.7 percent per year in 2009, as the economy of Thailand’s major trading partners continue to recover. Meanwhile, private spending in 2010, especially private consumption, is expected to show an improving trend, due to higher farm income following higher agricultural price and better employment situation. Private consumption is projected to expand at 4.3 percent per year, while private investment is expected to grow from the low base last year at 8.2 percent per year. For internal economic stability, headline inflation is projected to rise to 4.0 percent per year (or within the range of 3.5 - 4.5 percent per year) given higher oil prices and higher prices of goods as services that use oil as inputs. The conjecture of the cessation of Government’s measures to alleviate cost of living during the third quarter of the year would also contribute to higher inflation. For external stability, Thailand is projected to record a smaller current account surplus in 2010 at 2.4 percent of GDP (or within the range of 1.9 — 2.9 percent of GDP), as the revival in domestic demand and low base last year are expected to lead to faster expansion of import value.
The Director-General of FPO concluded that these economic projections have already taken into account the potential impact from the suspension of investment projects in Map Ta Phut Industrial Estate area and the ongoing political situation. If the government could quickly resolve these problems and accelerate the disbursement under the “Stronger Thailand 2012” program to achieve at least 80 percent of approval budget framework, the Thai economy would likely to grow at the high case of projection range at 5.0 percent per year in 2010.