2013 growth may beat 4.6 percent forecast: BOT

The Bank of Thailand might raise its 2013 GDP growth forecast next month, as there is a good chance that the economy will expand beyond the recently forecast 4.6 per cent, according to Methee Supapong, director of the central bank’s Domestic Economy Department.

In making its forecast, the central bank is less worried about domestic factors than external ones, particularly the issue of how the “fiscal cliff” scenario in the United States will play out. Uncertainty in the European Union economy has declined, while foreign fund flows should be closely monitored in the wake of Japan’s recent leadership change, he said.

Growth in Thailand’s gross domestic product will be supported by the government’s acceleration of budgeting for infrastructure projects, which will in turn boost private investment, Methee said. “The central bank will monitor the inflationary effects of the nationwide implementation of the higher daily minimum wage on January 1, but the move is not expected to affect inflation as much as previously feared,” he said. The BOT yesterday announced that GDP grew in November from the month before thanks to strong domestic consumption and investment. Methee added that domestically, there were almost no serious risk factors facing the Thai economy next year. Therefore, it is possible that GDP could register growth of more than 4.6 per cent, driven by domestic consumption and private investment. If the state agencies boost spending, it will stimulate spending by the private sector, including investment in infrastructure. Possible risk factors include political instability and the impacts of the Bt300 daily minimum wage, the director said.

Excerpted from The Nation, December 29, 2012

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