The Bank of Thailand (BoT) forecasts the GDP growth rate in 2012 at 4.9% and warns against a recession in the EU economy.
BoT Deputy Governor for Monetary Policy Paiboon Kittisrikangwan said the central bank had adjusted the GDP forecast up to 4.9% from the previous 4.8% despite the flooding situation last year. The 4th quarter 2011 saw a GDP shrinkage of 7.4% compared to the previous quarter due to the floods. The negative growth rate of the 4th quarter was even worse than the figures during the 1997 Thai economic crisis and the global downturn in 2008. The GDP shrinkage late last year might reduce the whole year growth to 1% from the previous forecast of 4.1%.
The central bank also forecast that the 2012 Thai economy would be mainly driven by domestic demand such as that expected in the renovation and repair works after the floods, consumption and budget spending on the government’s urgent flood prevention projects worth 17 billion baht and the long-term prevention projects worth 350 billion baht. With orderly developments of domestic demand coupled with a gradual revival of foreign demand, the 2013 economy of Thailand is expected to grow 5.6%.
The BoT added that the current policy interest rate of 3% was suitable for the decreasing inflation rate. However, the Monetary Policy Committee is still monitoring domestic and international factors in considering the monetary policy which is flexible and adaptable to the current situation.
Source: http://thainews.prd.go.th/en/news.php?id=255502030022
