NESDB upbeat about economic growth prospects

The economy is likely to fare better in the second half than the 2.9% growth recorded in the first half thanks to improving public investment, accelerated budget disbursement and tourism growth.

Arkhom Termpittayapaisith, secretarygeneral of the National Economic and Social Development Board (NESDB), said GDP in the fourth quarter would exceed figures in the previous quarters because 40.2 billion baht of the Highways Department’s budget for road construction and improvements would start being disbursed in September.

Other contributors will include budget disbursement in the final quarter of fiscal 2015 and the first quarter of fiscal 2016 as well as an economic stimulus package and the growing tourism sector.

“The infrastructure projects, state expenditure and tourism will be instrumental in economic growth in the latter half” said Mr Arkhom, who is also the new transport minister.

According to the NESDB’s report, the second half will see additional budget disbursement of about 1.6 trillion baht, up 1.6% from the same period last year.

Mr Arkhom said the tourism sector was expected to grow at a strong rate and continue to support the economy.

The Tourism and Sports Ministry is maintaining its target for foreign visitors at 28.8 million this year.

In the first half, the number of inbound tourists totalled 14.9 million, up 29.5%, generating income of 727 billion baht, a 24.1% increase.

The NESDB last week reported the economy slowed to 2.8% growth in the second quarter, down from 3% in the first quarter.

After seasonal adjustment, the economy in the second quarter expanded by 0.4% from 0.3% growth in the first quarter, the government’s economic planning unit said.

In the first half, the economy grew by 2.9% year-on-year, improving from 0.2% growth in the first half of 2014 and 1.6% growth in the second half of 2014.

Key contributors were public investment and tourism, while exports were hit by the global economic slowdown.

Hotels, restaurants and construction saw robust growth. The agricultural sector suffered the effects of drought, while a contracting industrial sector mirrored the decline in export-oriented industries.

Given the weaker economic performance in the second quarter, the NESDB slashed its 2015 GDP growth forecast to 2.7-3.2%, down from 3-4% in May.

It also shaved its full-year export forecast to a 3.5% contraction from 0.2% growth.