5% contraction anticipated in Q4
Thailand's economy would contract at 5 per cent in the fourth quarter, sharper than the previous forecast of 2-3 per cent, according to the Fiscal Policy Office.
Somchai Sujjapongse, director-general of the office, said today that economic indicators last month suggested a contraction for a second consecutive month in consumption, investment and exports.
"The flood impacts on the economy are worse than expected," he said.
The fourth-quarter contraction will pull down the full-year growth rate to only 1.1 per cent. Private consumption for the full year should expand at 2.3 per cent on year. While private investment will expand 8.4 per cent on year, public investment contracts by 6.6 per cent.
Yet, the office forecasts a strong recovery next year, when the economy should expand at the rate of 5 per cent.
Private investment would likely expand 10.3 per cent up from 8.4 per cent this yea, while public investment would grow 8.8 per cent.
The dollar/baht exchange rate should move in the range of 29.8 to 31.8 per US dollar. The country is expected to run current account deficit of 0.5 per cent of gross domestic product, from a surplus of 2.9 per cent this year, due to the imports of capital goods.
