Thai Finance Ministry Raises Economic Growth Estimates for 2009 and 2010

Director-General Satit Rungkasiri of the Fiscal Policy Office said the ministry made a new projection that the economy in 2009 would shrink only 2.8 per cent against the contraction of 3 per cent expected earlier.

For 2010, it forecast the economy would grow 3.5 per cent or 3-4 per cent against the 3.3 growth estimated previously.

The upward economic growth revision stemmed mainly from the effective state-supported economic stimulus package, private consumption recovery, improved global economy, particularly economies of Thailand’s trading partners, and a tourism turnaround.

He said the economy this year would be driven by faster budget disbursement under the Thai Khem Keng (Strong Thailand) scheme.

Should the annual budget be disbursed by 50 per cent, he said, the country’s gross domestic product (GDP) would grow up to 3 percent, but if the budget were disbursed by 80 per cent, GDP would expand 3 per cent.

In addition, the economy will also be boosted by expanding consumption and the world economic recovery, as well as higher incomes earned by farmers and the reduced unemployment.

However, there remain some risk factors that need be monitored including the fragile global economic recovery, higher product prices, and delayed resolution of the Map Ta Phut case.

Domestic political conflicts continue as a key risk factor that could affect consumer spending recovery.