Thailand's leading economic think tank, the National Economic and Social Development Board (NESBD), on Feb. 25 revised sharply upward its growth forecast for 2008, amid expectations for a surge in exports and increased private investment. The economy is now expected to grow between 4.5%-5.5% this year. "I would not have the confidence to make this forecast if I did not have solid data on major new investments and exports, in addition to the positive economic upturn in the final quarter of last year," Ampon Kittiampon, NESDB's secretary general, said.
Thailand posted 5.7% growth in the fourth quarter last year, beating market expectations, the board said. Whole-year growth was 4.8% for 2007.
Last year's growth was powered by exports, which rose 18.1%, despite fears that the strong Thai baht and the weak U.S. dollar would weaken sales to the U.S., the kingdom's biggest trading partner.
The Thai baht is trading at 10-year highs against the dollar, but the think-tank predicted that exports would continue to grow by 12% this year. Inflation is also expected to rise this year, reaching 3.2%-3.7%, against 2.3% last year, the NESDB said.
Ampon said the sunny outlook was helped by a slate of investment plans already approved by the Thai Board of Investment, including new developments in petrochemical, automaking, and electronics.
Despite fears of a slowdown in the U.S. economy, growth in exports to China and new markets in Eastern Europe should help cushion any downturn, he said. "Thailand's economy is likely to show sustained growth, although there are concerns about high oil prices, rising prices for consumer goods and a slowdown in the global economy," he said. "Those factors will affect the economy less if the government carries on its policies with proper financial and monetary measures, while making the private sector feel confident in the economy," Ampon said.
Copyright Agence France-Presse, 2008