Nida identifies drivers of 4.5% GDP expansion
GROSS DOMESTIC product is expected to enjoy 4.5-per-cent growth this year, likely driven by government spending, economic recoveries in trade partners and inclusion into the Asean Economic Community (AEC), according to the National Institute of Developmen
Domestic consumption could improve gradually on the government’s policies aimed at boosting people’s income and purchasing power, including wage increases, subsidies for agricultural products especially rubber, and a tax deduction for travel expenses.
State spending could also help boost the economy this year, particularly in the second quarter, after acceleration of spending on the government’s investment projects.
Exports are expected to rise 5.0 per cent on improvements in trade partners’ economies. The United States, which is the third-largest trade partner, has shown signs of economic improvement. The US accounts for 8.2 per cent of Thailand’s trade.
China, the largest trade partner at 13.7 per cent, could continue to expand at 7.1 per cent. Other trade partners, including Japan and Europe, with their monetary easing, could also expand.
Thailand could gain from the AEC, which will materialise this year, as trade with Asean countries, which sees average growth of 6.5 per cent per year, accounts for about 25 per cent of the total. Of this portion, trade through 89 border checkpoints amounts to Bt1 trillion.
Last year, Bt1.3 trillion in investment projects was approved for promotion last year. That would drive up domestic investment by 8 per cent this year.
Inflation is forecast to stay in a range of 1.5-2.0 per cent and the central bank’s policy interest rate is anticipated to remain at 2.0 per cent.
The baht is projected to move in the range of 32-34 per US dollar. The Stock Exchange of Thailand is expected to climb to 1,750 points after the anticipated economic expansion and the capital market development plan between Thailand and the AEC.
