Thai economy showing solid growth

The Thai economy expanded by 3 per cent in the first quarter of 2011, supported by growing exports, investor confidence and domestic consumption, said Arkom Thempittayapaisit, secretary-general of the Office of the National and Economic and Social Development Board (NESDB).

Saturday 28 May 2011, 03:05AM

Exports of goods valued in US dollars hit a record high of US$56 billion, a 27.4 per cent growth year-on-year. In terms of baht, exports were valued at Bt1.7 trillion, an 18.6 per cent growth, the smaller percentage resulting from the baht strengthening by 6.9 per cent compared with the same period last year.

The agricultural sector grew by 6.7 per cent due to the increase of farm products by 12.2 per cent – particularly rice, sugarcane, corn and rubber – while the prices of agricultural products rose 25.7 per cent, so agricultural income in the first quarter rose 41 per cent from 19 per cent in the previous quarter.

In the tourism sector, tourist arrivals in the first quarter were recorded at 5.4 million people, an increase of 15 per cent from the last quarter of 2010. The increase came mainly from Asian countries, especially China, South Korea and India, the NESDB said.

Thanks to increased farm income and a fall in unemployment to 0.8 per cent, household spending grew by 3.4 per cent. Consumer confidence in the first quarter was 71.9, up 0.6 of a point from the earlier quarter. Primary drivers of confidence were higher civil servant salaries and increases in the minimum wage. Braking confidence somewhat was consumer reluctance to spend in the face of rising prices of goods.

Private investment grew by 12.6 per cent from the previous quarter, supported by domestic and overseas demand. Imports of capital goods and car sales for commercial purposes expanded 24.5 per cent and 17.5 per cent respectively.

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The NESDB maintained its optimistic projection that the Thai economy this year is likely to grow between 3.5 and 4.5 per cent.

It warned, however, that there are potential problems arising from global financial woes including the slowing Japanese economy, high interest rates and rising oil prices.

The NESDB predicted that inflation this year is likely to be around 3 to 3.8 per cent, with household consumption projected to expand by 3.7 per cent.

Thailand’s current account surplus is projected at 3.1 per cent of Gross Domestic Product (GDP), down from a surplus of 4.6 per cent in 2010. – MCOT



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