Improved exports, budget disbursement to spur growth 

Kasikorn Research Centre (KResearch) has raised its forecast for this year’s expansion to 3.4 per cent from the earlier estimate of 3.3 per cent due mainly to robust export recovery and a higher-than-expected rise in household spending in the first half.
Thai export growth has been revised up to 3.8 per cent for the whole of 2017, the research house said. 
Kalin Sarasin, chairman of the Board of Trade of Thailand and the Thai Chamber of Commerce, said the Thai economy is expected to grow in a range of 3.5-4.0 per cent this year on the back of higher-than-expected export growth and recovery in tourism.
In the first five months of this year, Thai exports grew 7.2 per cent. This year’s exports are predicted to be close to the Commerce Ministry’s target of 5 per cent, Kalin said.
On the government front, the Fiscal Policy Office (FPO) forecast the Thai economy to grow 4 per cent this year if the additional budget disbursement turned out to be higher than expected.
Krisda Chinavicharana, FPO director-general, said the additional budget disbursement was previously estimated at 31 per cent. However, the figure is expected to rise until the end of the current fiscal year, he added.
The FPO earlier estimated growth of 3.6 per cent in 2017, while the additional budget disbursement was targeted at 50-60 per cent of Bt160-billion additional budget.
“We will revise our forecast for the economic indicators later this month. Initially, the additional budget will likely be disbursed as planned. But if it is higher than targeted, the GDP [gross domestic product] will rise further,” Krisda said.
Improvement in employment and imported capital goods reflected better investment. In May, import of capital goods significantly increased by 13.7 per cent, he said, signalling an improvement in private investment in the second half of this year.
“Economic stimulus measures are not expected as the economic recovery could go ahead without government assistance. If any business faces problems in the future, there could be support for that particular sector,” he said. 
In the second half of this year, KResearch warned that there could be challenges from weak crude prices, which could slow down the recovery of Thai exports and farm incomes as a result of oversupply. 
Meanwhile, the research house still maintains its estimate of 4 per cent in commercial banks’ credit growth this year on expectation of improved credit extension in the second half on continuing economic activities.
The Thai policy rate is expected to remain on hold at 1.50 per cent for the rest of this year in support of the Thai economic recovery. The baht is forecast at 34.5 per US dollar at the year-end.
As for the emergency decree on management of migrant workers, it is expected to cost about 0.03 per cent for the nation’s GDP or about Bt12.4 billion, said Nattaporn Triratanasirikul, head of research at KResearch
“This year’s impact will likely be limited from a six-month postponement of the decree’s enforcement and this could be enough for migrant workers to deal with their work permits without long business suspension,” she said.
However, the decree could be a key issue for Thai operators after its enforcement next year, she said. Presently, there are about 1 million migrant workers without work permits.
The agricultural sector and extended businesses are expected to bear the brunt of the impact, followed by hotels, restaurants, trade and construction with combined employment of alien workers at more than 65 per cent of total alien workers in Thailand, she said.