SCB expects 1.8% growth in 2011
Siam Commercial Bank's Economic Intelligence Centre sharply revised down Thailand's 2011 economic growth forecast to 1.8 per cent, due to suspension in manufacturing activities which caused supply-chain disruptions, damage to agricultural crops as well
In the fourth quarter, the economy should contract 4 per cent on year, compared to the third quarter, said Suthapa Amornvivat, the bank's chief economist.
Yet, she believed that the economy would expand sharply in 2012, probably by 4.5 per cent, thanks to the government's investment to rehabilitate the country. This will induce private investment. Meanwhile, the manufacturing sector is expected to boost capacity in the second half in response to higher demand from local and foreign clients. Export value could rise 11 per cent next year, compared to nearly 20 per cent in 2011.
"Though, foreign direct investment may slow initially as damage evaluation is underway and damage to infrastructure," she said.
She also expects a cut in policy rate to help lower the financing cost. Inflation is also expected to gradually soften, in line with mild increases in oil prices as well as baht stabilisation.
Suthapa added that investor confidence in debt crisis in the euro zone would be two major economic risk factors in 2012. She noted that water management measures would be the key in restoring investor confidence.
