Bangkok Post: The world windows to Thailand

ECONOMY

The University of the Thai Chamber of Commerce forecasts 4.7% economic growth next year, with the recovery starting from mid-year and supported by government investment and populist economic policies.

However, Thai growth may sag to 2-3% next year if the country has domestic political problems coupled with a dour Western outlook rooted in the European debt crisis, said Thanavath Phonvichai, the university's director of the Center for Economic and Business Forecasting.

The 4.7% forecast assumes GDP at current prices will reach 11.587 trillion baht, driven by the government's plan to spend 500 billion baht for flood rehabilitation. Some 150 billion baht is projected to be injected into the system from the government's paddy mortgage scheme and the increase in daily minimum wage.

The centre projected growth of 2.8% in the northeast, 3.8% in the north, 2.8% in the south, 6.1% in the central region and 4.8% in Greater Bangkok.

The projection assumes global economic growth of 4% with the US at 1.8% growth, and the EU and Japan at 1.1% each.

Mr Thanavath forecast exports would resume to normal levels by the second quarter next year, with full-year growth in 2012 projected at 10% for US$248.57 billion. The centre predicts export growth of 16.5% to $225.65 billion this year, with imports of $209 billion, resulted in a trade surplus of $15.95 billion.

The exchange rate next year is forecast between 29-30 baht for a dollar, compared with an average of 30.50 baht this year.

For the fourth quarter, it predicted a contraction of 3.7% as the floods caused a delay in consumption and investment in the private sector. GDP growth this year is projected at 1.4%, the lowest in two years.