ASEAN KEY DESTINATIONS
Exports, tourism, local consumption, drive Thai economy
Exports, tourism and domestic consumption helped the Thai economy expand in February, the Bank of Thailand said in its latest economic report.
Inflationary pressure also rose as more businesses expect price increases to gain momentum over the year, said Mathee Supapongse, senior director for the Domestic Economy Department.
A central bank survey showed the number of entrepreneurs who expected inflation to accelerate by more than 6 percent by 2012 increased to in February from 3.5% in January..
The increase in inflation is likely to prompt the Monetary Policy Committee to gradually increase the policy interest rate that currently stands at 2.5 percent.
The cost of production has increased, but demand remains firm, meaning businesses can pass on higher prices to consumers more easily, said Mr. Mathee.
Exports hit a record in February of $18.4 billion, 29 percent year-on-year growth, driven by high prices for rubber, tapioca and palm oil as well as strong demand for hard disk drives. Prices of key crops rose 36 percent from the same period last year. This also helped stimulate vehicle sales.
Meanwhile, private investment increased because of reconstruction after the floods late last year.
Mr. Mathee said exports would total $17.2 billion, a 22 percent year-on-year increase, if gold was excluded. Manufacturing growth declined in February due to a temporary shutdown of petrochemical plants for maintenance and a slowdown in hard disk drives due to changes in order specifications. The sector would have expanded 2.9 percent if not for petrochemicals and hard disk drives, higher than before the global downturn in 2008 when growth stood at 2.5 percent, he said.
Tourist arrivals were robust, with hotel occupancy at 69 percent, up from 66 percent in the same period last year.
The economy ran a US$2-billion trade surplus in February. Income from trade in goods and services recorded a net surplus of $3.8 billion. The overall balance of payments posted a net gain of $4.2 billion.
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