ASEAN KEY DESTINATIONS
Thailand growth rate revised downward
Growth decelerated in the second quarter of this year to 2.6 percent after auto and electronic exports had dropped as a result of the supply chain disruption following the earthquake and tsunami in Japan.
Global economic growth was revised down to a range of 3.6 percent to 4 percent this year from between 3.8 percent and 4.2 percent earlier as a result of the debt crises in the US and Europe, especially in Spain and Italy.
The Thai export growth projection was in turn cut to 16.5 percent from 17 percent.
The National Economic and Social Development Board (NESDB) yesterday lowered its economic growth forecast even though Thai exports to the troubled markets account for only 10 percent of the total. The country's main markets in Asia remain promising.
However, capital inflows to Asia have strengthened the baht, projected in the range of 29.50 to 30.50 baht to the US dollar.
Oil prices are expected to soar with Dubai crude projected at US$103-107 a barrel this year, an upward revision from $98-107.
NESDB secretary-general Arkhom Termpittayapaisith said inflation was revised up to the range of 3.6 percent to 4 percent from 3 percent to 3.8 percent due to the high oil prices.
New government investment could be delayed until next February, resulting in a possible 1.5 percent year-on-year contraction this year, compared with 3.5% growth in the previous projection.
The second-quarter 2.6 percent growth was a 0.2 percent contraction from the first quarter, when the economy grew by 3.2 percent year-on-year. The quarterly economic growth rates last year were 12 percent, 9.2 percent, 6.6 percent and 3.8 percent, respectively.
The slower second-quarter growth was caused by lower exports of automobiles and electronic products in the aftermath of the March 11 Japanese disaster. Thailand is the largest automobile production base in Southeast Asia.
Jewelery exports to the US and Europe also dipped while government expenditures contracted by 9.9 percent.
First-half economic growth was 2.9 percent, but the government's think-tank agency forecast 5 percent expansion for the second half, supported by improved automobile and electronic exports.
On a bright note, Mr. Arkhom said the tourism sector would grow at a faster pace this year, with a projection of 19 million foreign visitors, up from 18 million.
The agency has yet to project the growth figure for next year, but it is possible that the government's policy of increasing incomes and spurring domestic consumption will help to drive growth up by one percentage point.
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