The Fiscal Policy Office (FPO) has lowered its economic growth projection for 2013 to 4.5%, with a growth range of 4% to 5%, from a previous forecast of 4.8%, FPO director general Somchai Sajjapongse said on Thursday.
The gross domestic product (GDP) growth target for the year was adjusted on the back of the slower than expected economic recovery of Thailand’s major trading partners and declining domestic consumption and private investment, he said.
Mr Somchai said he expected that GDP growth for the second quarter of the year would stand at about 4%, and more than 4% in the third and fourth quarters, enabling the economy to grow about 4-5% as projected.
He said the projection was based on the assumption that the economies of 14 of Thailand’s major trading partners would grow 3.4%, the price of Dubai crude oil would stand at US$101-111 per barrel, the exchange rate at 30 baht to the US dollar and the policy rate at 2.5%.
The main factor that prompted the FPO to lower GDP growth projection to 4.5% was the economic slowdown in 14 major trading partners, he said.
But strong points that helped spur the economy this year included good expansion in the tourism sector and the country’s strong economic fundamentals, he added.
The FPO has meanwhile lowered its export growth target for the year to 5.5% from 9%, said Mr Somchai.
He projected an inflation rate of 2.5% for the year, lower than the previous projection of 3%, in line with the declining global oil price, due to a drop in demand for oil caused by the global economic slowdown.
Mr Somchai said this year’s unemployment rate would stand at a low level of 0.7%, while the current account deficit would be minimal, at US$2.2 billion, or 0.5% of GDP. The trade surplus would slightly drop to US$2.9 billion on the back of higher import than export values, he said.
If the GDP growth is to be higher than projected, the government will have to speed up its investment in the 350 billion baht water resources management projects and the 2 trillion baht infrastructure development megaprojects, Mr Somchai said.
Moreover, exports must be promoted to meet the export expansion target set by the Ministry of Commerce and encourage more foreign tourists to visit Thailand. By doing this, the economy could grow by 5% this year, he added.