Somkid: 2016 growth could speed up to 3.5%

Somkid: 2016 growth could speed up to 3.5%

A woman shops at a department store in Bangkok on July 1. (Reuters photo)
A woman shops at a department store in Bangkok on July 1. (Reuters photo)

The economic growth is expected to accelerate to between 3.2% and 3.5% this year, largely fuelled by increased foreign investment and record-high tourism, a deputy prime minister said on Monday.

Southeast Asia's second-largest economy, which grew 2.8% in 2015, has been hit by slowing global growth and weak demand for Thai exports, although tourism has remained a bright spot.

"The economy is now moving forward from increasing foreign direct investment and a record-high number of tourists," Deputy Prime Minister Somkid Jatusripitak told reporters.

The military government, which seized power in a May 2014 coup after months of street protests against the elected administration, has said it aims to revive the underperforming economy by spending on big-ticket infrastructure projects.

Thailand expects to invest $4.3 billion on infrastructure over the next five years, Somkid said.

"Our economic fundamentals remain strong, and it [stock market] will be back up shortly," Mr Somkid told reporters.

The economy has weathered more than a decade of political strife that has seen governments toppled and violent street demonstrations sapping investor confidence.

The main stock index tumbled as much as 3.6% on Monday and the baht fell near three-month lows amid concerns about the king's health.

The forecast is in line with that of the Thai central bank, which recently raised its 2016 economic growth projection to 3.2% from 3.1%.

Thailand expects a record 33 million visitors this year, driven mostly by an increase in Chinese tourists. Tourism accounts for about 10% of Thailand's gross domestic product.

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