World Bank projects Thai economy to grow 3.5% this year

Thai economy

The World Bank has projected that the Thai economy will grow 3.5 per cent this year and 4 per cent next year, rebounding from last year, when it contracted 2.7 per cent.

Dr Kirida Bhaopichitr, country economist for Thailand at the World Bank’s Bangkok office said Thai exports are projected to expand 15 per cent this year thanks to improved economy of Thailand’s trade partners and recovery of the tourism sector.

Private investment is likely to recover but only slightly to stay around 4-5 per cent owing to surplus production.

It remains to be seen whether private investment will grow in line with state investment or not, Dr Kirida said.

However, both domestic and overseas factors have affected Thai economy.

Local political factors, which may have an impact on the government’s policy implementation, as well as suspension of the country’s Map Ta Phut industrial projects, can cause investors to lose confidence.

External factors are recovery of the global economy, the Influenza type A (H1N1) situation and high oil prices at US$ 76 per barrel, contributing to consumer goods to rise not over three per cent in 2010-2011.

The World Bank viewed that appreciation of Thai baht is in line with other Asian currencies thanks to capital inflow. The baht is expected to stay at 32 baht against US dollar.

The policy interest rate is likely to be raised 0.25-0.5 per cent in the second half of this year, the economist said. (TNA)