Thai ministry raises growth, export forecasts

BANGKOK: Thailand’s finance ministry, shrugging off concern that protectionism could hit the country’s shipments this year, raised its 2017 forecasts for economic growth and exports.

Southeast Asia’s second-largest economy has lagged regional peers since a 2014 army coup ended months of political unrest. Exports and domestic demand have been weak.

Yesterday, the ministry said the economy is expected to grow 3.6% this year, up from the 3.4% projected in October, thanks to higher public spending and stronger exports. If growth is 3.6%, this year would be the best since 2012, when there was 7.2% expansion.

On Friday, the government approved an additional 190 billion baht (RM23.8 billion) in spending this fiscal year, which ends in September. It will mainly be spent in rural areas.

“Growth will be driven mainly by government spending, particularly in infrastructure projects, and an extra budget,” Krisada Chinavicharana, head of the ministry’s Fiscal Policy Office, told reporters.

“There is a chance that growth this year will rise to 4% if exports grow more than expected and public spending accelerates faster than thought,” he said.

The ministry expects exports to rise 2.5% this year, rather than the 1.8% seen in October.

Thailand’s exports rose 0.45% in 2016, their first increase in four years.

The Bank of Thailand has forecast 2017 GDP growth of 3.2% and flat exports.

Sarun Sunansathaporn, an economist at Krungsri Research, predicted 2017 growth of 3.3% as Thailand “is still in an early state of recovery”. – Reuters