Thursday, November 21, 2019

Economic growth above 3% ‘achievable’

Mar 26. 2017
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By Somluck Srimalee
The Nation

2,656 Viewed

THE STRONG confidence shown by public and private enterprises with their investment budgets is good reason to believe that Thailand’s economy will grow by more than 3 per cent this year, economic experts said.

Total investment by private and state enterprises is set to exceed Bt1 trillion, while the government’s investment budget for this fiscal year is worth Bt400 billion.

There will also be an extra Bt160 billion drawn from the govฌernment’s central budget this fiscal year to add to the regular investment budget.

All of this investment worth a combined Bt1.56 trillion is expected to stimulate gross domestic product by about 0.30.4 per cent.

Meanwhile, overall tourism revenue is targeted at Bt2.77 trillion, for another GDP stimulus of about 1 per cent.

Export value is targeted at Bt1.96 trillion this year, which would drive the country’s GDP growth by about 0.6 percentage point if achieved.

These three engines in combination – investment, exports and tourism – should add about 2 perฌcentage points to GDP growth, with a further 1 percentage point coming from domestic consumption and service businesses.

“We estimate the country’s GDP growth at 3.14.1 per cent this year. That [compares with] the country’s economic growth of about 3.2 per cent last year,” Krisada Chinavicharana, directorgeneral of the Fiscal Policy Office of the Finance Ministry, said recently.

The GDP growth forecast is based on the government’s spending plan for this year, which will be one of the main engines to drive the economy. State spending is to be higher than last year’s Bt190 billion.

Most of the government’s infraฌstructure investment plans such as the doubletrack rail system, mass transit in Greater Bangkok, motorways and enhancements to the country’s international airports will have a positive effect on the economy.

The agriculture sector also has shown signs of recovering this year on rising global agricultureproduct prices.

The export sector is expected to benefit from the economic recovery of many of Thailand’s trade partners, Krisada said.

The World Bank forecasts Thailand’s GDP to grow by 3.2 per cent this year, helped by improved confidence and accommodative policies.

Hongkong and Shanghai Banking Corporation (HSBC) has revised upwards Thailand’s ecoฌnomicgrowth forecast for 2017 and 2018 to 3.2 per cent for both years, compared with the previous estimates of 2.8 per cent and 3 per cent respectively. Ongoing public investment is the reason for the reviฌsion.

Nalin Chutchotitham, an econoฌmist at HSBC Thailand, said recentฌly that the key upsides for the econฌomy were public investment, private consumption and exports of services, mainly from tourism. These drivers also helped to offset the drag from sluggish exports of goods, private investment contraction, and continฌued destocking.

In 2017, HSBC expects public investment to remain one of the key drivers of GDP although it will likely decelerate after a surge in 2016.

 

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