ASEAN KEY DESTINATIONS
January 19, 2008
Export and Import Bank of Thailand executive chairman Narongchai Akkaraserani on Friday expressed concern over the delay in the formation of the new government and questioned its readiness to drive the country's economy.
He said what the new government must do urgently is to stimulate investment in various projects because it could benefit the country.
More importantly, it must attempt to cope with increased product prices due to the surging cost of oil.
What he is worried about now is the delay in the formation of the government and whether it is ready to drive the economy.
Regarding the baht volatility, he said, the Bank of Thailand is authorised to manage and supervise the currency movement.
He conceded the baht rise had an impact on a large number of small companies, but had a little effect on major companies competent to cope with the currency volatility.
So, the situation had not adversely affected the economy. In contrast, some businesses had benefited from the baht rise since they could import capital goods at lower prices.
Regarding the interest trend this year, Mr. Narongchai said the persistent sub-prime lending crisis would have repercussions in Thailand. To curb the crisis, the United States must attempt to keep key interest rates low.
In the current situation, it is unlikely global interest rates will edge up.
For Thailand, the interest rate should be even lower because liquidity is still high. The interest cut would help curb the flow of US dollars into the country.
He predicted that local investment this year would outpace that of last year, which would help drive the economic growth of more than 4.5 per cent.
At present, he said the Thai economy is in a good position to grow since the production sector is strong.
He also predicted the country's exports this year would expand by 10 per cent.