Bank of Thailand confident on growth

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Bank of Thailand confident on growth 
Bangkok Post: 4 Jun 2010
BoT confident of economic growth in 2nd half of 2010
วันศุกร์ ที่ 04 มิ.ย. 2553

BANGKOK, June 4 (TNA) – Bank of Thailand (BoT) Deputy Governor Bandid Nijathaworn on Thursday voiced confidence the Thai economy would continue growing in the second half of this year despite impacts of the recent political mayhem.

He said the economy is expected to enjoy continued expansion given the economic growth of 12 per cent witnessed in the first quarter, strong economic
fundamentals, high financial liquidity, low interest rates, continued export growth due to the global economic recovery, and increased state spending.

“Although economic figures, particularly from the tourism sector in May and April may be affected by the political unrest, the economy is likely to sustain growth in the 2nd half of this year, boosted by many positive factors.

“Still, it needs to be monitored how economic figures in April and May will be and whether the economy will be able to recover after this month. We believe the gross domestic product in the 2nd quarter will drop but not considerably,” he said.

In addition, Mr. Bandid believed, the global economy would continue recovering given the sound economic expansion of major countries including the United States, Japan and Asia in the first quarter of this year. The trend could contribute to Thailand’s economic growth.

However, what the central bank is wary of and must monitor closely now is the debt crisis some European countries are facing because it could affect the global economic recovery. The local political uncertainties and drought would also affect more or less the economic growth.

Regarding the interest trend, he said, the central bank had earlier planned to raise the policy interest rate in March, but it suspended its decision due to the political violence.

Should the economy manage to recover satisfactorily, the debt problems in Europe ease and the political situation improve, the central bank would definitely raise the policy interest rate.

However, it would be a gradual interest hike so that economic recovery would not be affected, he said. (TNA)