EXIM Bank

The Thai economy is projected to shrink 4 per cent this year if the government succeeds in applying Bt400 billion of loans being sought by the Ministry of Finance to restore and rebuild the economy as scheduled, according to a top economist.

Narongchai Akrasanee, chairman of the Export and Import Bank of Thailand (EXIM), said, however, that if the loans were not taken, the economy might contract more than expected.

Such a course would make the baht continue to appreciate against the US dollar for the rest of this year as the dollar had weakened.

At the same time, he said, Thailand’s international reserves, which remain more than US$100 billion now, had increased month by month and a certain amount of foreign capital had flowed in for investment in the market.

“Unless the executive decree allowing the government to seek Bt400 billion in loans passes the parliamentary vote, I believe the economy will shrink more than the current level.

“Now, only is the government in a position to spend and invest in many areas, as the private sector has slowed investment. Therefore, the government should accelerate implementing the second economic stimulus scheme through various investment projects,” he said.

Mr. Narongchai said he believed that Thailand’s exports this year would contract more than last year by at least 20 per cent.

“All parties should stop projecting the export trend because it has already contracted,” the EXIM chairman advised,” Instead all parties should turn to see whether new markets, particularly Asian countries with growth potential have been restructured yet.”