ASEAN KEY DESTINATIONS
Thai growth on course
"Economic growth may come in at more than 4.5 percent, but we're maintaining our forecast due mainly to the troubles in the automotive industry," said secretary-general Arkhom Termpittayapaisith,
Last month, domestic automotive assembly fell by 15 percent, with car exports contracting by 9% from March due to effects from the Japanese disaster.
The industrial sector expanded by only 1.7 percent in the first quarter, down from 4.8 percent in the previous quarter, due to reduced production of hard disk drives and automobiles, a direct result of a parts supply shortage from Japan following the natural disasters.
The industrial sector is expected to slow down further in the second quarter due largely to traditional slower growth in the automotive and related industries during this time, said secretary-general Arkhom Termpittayapaisith.
However, he predicts the impact of the troubled automotive industry on the overall economy for the full year will be insignificant.
Thailand's gross domestic product expanded by 3 percent year-on-year in the first quarter, down from 3.8 percent, 6.6 percent, 9.2 percent and 12 percent in last year's first through fourth quarters, respectively.
Mr. Arkhom said this year's first-quarter growth was driven by exports, higher agricultural product prices and volume - especially for rice, sugarcane, corn and rubber - a 14.5% year-on-year rise in tourist arrivals to 5.4 million, increased domestic spending and a jump in private investment.
The momentum is continuing in terms of consumer confidence and private investment, while exports remain competitive as countries such as Vietnam, Indonesia and India face rising costs, he said. Exports have long been the main driver of economic growth in Thailand and after jumping 28% last year had been expected to slow this year.
However, first-quarter exports were valued at $56.9 billion, up by 28.3 percent year-on-year. The NESDB has revised up this year's export growth target to 17 percent from 12.5 percent previously and its import growth target to 20.5 percent from 14.6 percent.
It also raised the inflation target to a range of between 3 percent and 3.8 percent from 2.8 percent to 3.8 percent before.
However, the upward trend in interest rates could negatively affect both producers and investors through higher production costs.
Spending worth 20-30 billion baht for the general election will only slightly affect the country's economic growth, said Mr. Arkhom.
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