2 houses raise growth forecasts
Play
Kasikorn Research Centre and Tisco Research are the first two economic houses to upgrade their 2012 economic forecasts after the revision by the National Economic and Social Development Board on Monday.
While the economic think-tank raised its projection for economic growth this year to 5.5-6.5 per cent, KResearch yesterday raised its projection from 3.5-4.8 per cent to 4.5-6 per cent and Tisco from 4.5 per cent to 5 per cent because of the low base of exports and public spending in 2011.
Tisco revised its export growth forecast from 7 per cent to 9.6 per cent, after the 39-per-cent month-on-month increase in December’s manufacturing output. Public spending is expected to expand by 11.9 per cent this year, reversing the previous forecast of a contraction, assuming that Bt95 billion from the Bt350-billion post-flood spending is disbursed this year.
Siam Commercial Bank’s research arm expects gross domestic product to expand 4.5-4.7 per cent, thanks to higher consumption, public investment and public spending. The bank sees a full recovery in manufacturing in the second half, when machinery imports are completed and all firms resume normal operations. However, GDP this quarter is likely to shrink from the first quarter of last year.
“Growth will be significantly influenced by the recovery in the manufacturing sector as well as post-flood investment,” KResearch said.
Further boosting the economy will be public spending, but the house expects investment under the Bt350-billion fund to become clearer next year.
Post-flood private and public spending will boost GDP growth by at least 1 percentage point, or more if the government can kick off more investment plans, it said.
The research house noted that though the post-flood investment would spin off short-term benefits to the economy, the disaster could pose long-term disadvantages. Huge losses could encourage foreign companies to relocate for risk diversification. Some businesses may also delay investment until the flood-management plan takes shape.
The Thai economy is also going through a structural transition, as operating costs here are higher than in other regional countries. The gap will only widen when the minimum labour wage is raised nationwide, it said.
