Thai Economy Predited to Record Positive Growth in Q4 and 2010

The Permanent Secretary for Finance, Sathit Limpongpan, announced that Thailand’s economy is set to register positive growth in the fourth quarter due a strong increase in revenue earned from exports. He said Thailand’s economy had begun recovering as revenue from exports in October increased due to a shift from Thailand’s traditional reliance on a few major export destinations namely the United States, Europe and Japan to new markets such as Africa, the Middle East, and Asia where many countries are experiencing improved economic conditions. Meanwhile the business sector has continued importing capital goods such as machinery and raw materials, which will be used to increase the production capacity of the private sector, as well as products for consumption, he added.

Mr. Sathit predicted that Thailand’s economy will grow 3-4 percent in the fourth quarter of this year and would probably grow 3.3 percent in 2010 and that the government’s tax revenues will increase due to the economic recovery.

The World Bank has predicted that in 2009 Thailand’s economy is expected to contract by 2.7 percent while expanding 3.5 percent in 2010. Frederico Gil Sander, an economist at the World Bank’s Thailand office, said that while the Thai economy is showing signs of recovery, in the mid-term it is subject to several risk factors which will have an impact on economic growth. He said that the Thai economy has rebounded from the bottom but future growth was still unclear due to fluctuations in internal and external factors

The World Bank has boosted its projection for Thailand’s exports in 2009 to a 12.7 per cent contraction from 14.1 per cent in its previous forecast.

World Bank's senior economist for Thailand, Kirida Bhaopichitr, said the bank advised the Thai government to stimulate local consumption to make up for sluggish exports and to accelerate investment of the private sector. The government should speed up investment in infrastructure to reduce production costs of the private sector, to boost competitiveness and to create jobs.

The World Bank said the economies in the Asia Pacific region were vastly influenced by China.

Meanwhile, Kasikorn Bank’s Capital Markets Business Division Head, Thiti Tantikulanan is predicting the Thai Baht will appreciate to as much as 32.9-33.0 against the US dollar by the end of this year. He elaborated that the Thai baht appreciation is a result of the dramatic depreciation of the US dollar.