The Bank of Thailand (BoT) expects that the Thai economy in 2011 would expand by 3-5% amid the ongoing domestic polical instability and other risk factors from the rising inflation and sluggish economy of trading partners.

According to BoT Assistant Governor for Monetary Policy Group Paiboon Kittisrikangwan, the Thai economy would expand continuously since the beginning of the year, and the whole year’s expansion would be about 3-5%.

Meanwhile, the inflation rate in the country would remain high as the average headline inflation rate would be around 2.5-4.5% following the estimation of higher prices of products and increasing labor cost.

The core inflation is projected to move around 2-3% in accordance with pricing movements of energy and fresh foods. The estimated figure was dropped a bit after the government had indeffinitely extended its relief measure for free electricity use.

Nevertheless, the assistant governor continued that risk factors that would affect the estimate included economic recession of Thailand’s trading partners, the global economic slowdown and the political uncertainty in the kingdom.