The Fiscal Policy Office (FPO) has revised up its gross domestic product growth projection for 2012 to 5.7%, from the previous forecast of 5.5%, director general Somchai Sajjapong said on Wednesday.
FPO chief said the revision was based on the fact that domestic consumption and private investment had substantially increased, even though exports expanded by only 3.9%, less than the previous expectation of 4.5%.
Private investment rose by as much as 16.1%, the highest in the past eight years, he added.
The government’s policies to raise civil servant’s salaries, the rice pledging scheme, first-time car and home buyer programmes and the cut in corporate income tax had helped boost domestic spending and private investment, said Mr Somchai.
He admitted that exports expanded at a slower pace because of the impact of the global economic crisis and the remaining negative affects of the great flood late last year on some industries.
He expected general inflation for this year at 3.0%, in line with lower prices of oil and other commodities in the world market caused by the decline in demand due to global economic recession.
Mr Somchai projected GDP growth for 2013 of 5% on the back of the government’s spending in various infrastructure development megaprojects and an improvement in the global economy.
General inflation for 2013 is expected to stand at a range of 2.5% to 3.5%, he said.
Negative factors that could derail economic growth next year included economic slowdown in Thailand’s trade partners, especially the fiscal cliff problem in the US and the debt crisis in Europe, and internal political conflicts, he added.