FPO revises up economic growth forecast
The Fiscal Policy Office has revised upward the economic projection to 5.5 per cent up from 5per cent, said Somchai Sujjapongse, director-general.
The previous forecast was announced in December.
He said that public and private investment will drive growth this year. Private investment is expected to rise 11.9 per cent up from 7.3 per cent last year, while public investment to expand 12.1 per cent from 8.7 per cent contraction last year. Domestic consumption will also support economic growth this year, as private consumption would expand 4.5 per cent from 1.3 per cent last year.
High investment would lead to the current account deficit of 0.9 per cent of gross domestic product, or about US$3.5 billion.
"Running a current account deficit is not a bad thing as we need more investment," assured Somchai. The country has witnessed current account surplus for years as savings surpassed investment, he said.
The office also expected headline inflation to rise 3.6 per cent this year, compared with 3.7 per cent last year. Somchai said that inflation would not be as high as expected.
