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Thailand: Revision of Economic Growth Projection for 2010
Source: thailand.prd.go.th
Source Date: Thursday, September 30, 2010
Country: Thailand
Created: Oct 10, 2010

Thailand’s economic growth for 2010 is expected to expand by 7.5 percent, higher than 5.5 percent projected earlier. Because of several positive factors, the Ministry of Finance has decided to revise the growth rate projection for this year.

Director-General of the Fiscal Policy Office Satit Rungkasiri said that the economy of Thailand’s major trading partners is picking up. As a result, Thai exports have continued to increase, and they are expected to expand significantly this year.

Private investment is likely to grow by 16.5 percent, against only 4.2 percent projected previously. However, the Fiscal Policy Office is keeping a close watch on the appreciation of the baht, which might have an impact on Thai exports and the overall economic growth.

Meanwhile, Prime Minister Abhisit Vejjajiva stated that last year he felt that the country, particularly the Thai economy, needed a strong recovery going. The Government had introduced a stimulus package and the first half of the year saw 10.6 percent growth in GDP. It expected the whole year to be close to 8 percent. Unemployment is just below 1 percent, inflation is 3.5 percent, exports growing at around 30 percent per annum.

He pointed out that the country had achieved this without upsetting its longer term solution. The debt-GDP ratio is now stabilizing at around 42-43 percent. The Prime Minister said that the Government anticipated at the beginning of the crisis that the ratio would reach 60 percent, but now it felt that it might be below 50 percent.

The Prime Minister told a gathering of foreign business people and investors that the Thai economy appears to have decoupled itself from Thailand’s political difficulties. The economy has recovered well and fast from the recent political unrest. GDP expanded by 11 percent year-on-year in the first half of this year, and it is expected to reach 8 percent for this half. Such expansion was mainly driven by exports, investment, and private consumption. Production has also expanded across all key sectors. Tourism appeared to be the only sector that was adversely affected by the political unrest in the second quarter. But the setback was brief.

The Prime Minister was pleased to learn that foreign investors continued to have strong commitment to Thailand. On foreign direct investment, the number of investment applications for promotion granted by the Board of Investment during the first half of this year increased by 35 percent year-on-year. The value of total foreign investment applications nearly reached 100 billion baht, almost doubling the value applied in the first half of 2009.

On the year-on-year basis, private investment grew remarkably by 20 percent in the first half of this year, as reflected in the purchase of commercial durables, imports of capital goods and the expansion of construction areas for business and housing.

For all of these reasons, Thailand has revised its economic growth projection for this year.
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