Thai economy to grow 4.5% in 2009September 26th, 2008 - 4:19 pm ICT by Amrit Rashmisrisethi
Thai economic growth is expected to grow 4.5% next year, down from 5.1% this year, due to the global economic slowdown. Emergency decree recently imposed in Bangkok following anti-government protests by the People’s Alliance for Democracy will also affect tourism revenues this year, according the Fiscal Policy Office.
Mrs. Pannee Stawarodom, the Fiscal Policy Office (FPO) director-general, said on Thursday that while growth was slowing due to external factors, the Thai economy was still expected to outperform the 4.8% growth rate posted in 2007.
FPO economists said they had reduced their forecasts for Thai economic growth as consumption and investment growth had remained below expectations due to high inflation in the first half of the year and domestic political instability.
Even exports, which have been growing at over 20% to a record high this year, were expected to slow over the next several months with the slowdown in the overall global economy.
The emergency decree imposed in Bangkok following anti-government protests by the People’s Alliance for Democracy will also affect tourism revenues this year.
One measure of domestic consumption, value-added tax revenues, grew by 9.5% year-on-year in August, down from 23.3% growth the previous month.
But Mrs Pannee noted that inflation had fallen with global oil prices in recent months, leading the FPO to cut its forecast for the consumer price index to 6.3% for 2008 from earlier projections of 7.2%.
The current account is also projected to remain in surplus this year at 0.4% of gross domestic product, an estimate sharply lower than a previous forecast of a surplus of 1.4% of GDP.
For 2009, the FPO estimates growth of 4% to 5%, with a base case of 4.5% growth. Both domestic demand and investment are projected to rise next year, albeit from a low base.The key economic risks remain the global economy and a potential slowdown in 2009 exports of goods and services.
Source : National News Bureau, Public Relations Department of Thailand
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