Thailand growth forecast at 4.1% Bangkok Post: 29 Apr 2011 The Thai economy is likely to grow 4.1 per cent this year, with consumer prices expected to rise 3.9 per cent, according to the central bank’s latest economic review.The Bank of Thailand (BOT) expected inflation risks to outweigh those on economic growth, with the forecast for the average Dubai oil price to increase to US$108, from $91 per barrel.
The BOT predicted that core inflation, excluding oil and raw foods and favoured as its policy target, would rise 2.3 per cent this year.
BOT assistant governor Paiboon Kittisrikangwan said the twin natural disasters in Japan would take a significant toll on Thai economic growth in the second quarter of this year because of supply chain disruption. But reconstruction would help Japan’s economy rebound in the second half of the year.
"Local business confidence has remained sound during the past few months, but business voiced concerns over rising production costs.
"The current [policy] interest rate level is considered too low," Mr Paiboon said.
The widespread flooding in the southern region would affect the economy by 0.1 per cent, excluding state compensation, he added.
A Thai-Cambodian border checkpoint in in Trat's Khlong Yai district (Photo by Jakkrit Waekaryhong)
Federation of Thai Industries chairman Payungsak Chartsutthipol said the FTI does not agree with Foreign Minister Kasit Piromya's proposal that Thailand should close all checkpoints on the Thai-Cambodian border.
The proposal came after the clashes between Thai and Cambodian troops continued along the border in Surin province for the seventh day running. Border crossings in Surin have been closed.
"Closing all the border crossing points will only escalate the situation," Mr Payungsak said.
FTI chairman suggested that the government try to settle the border conflict in a positive way, by trying to peacefully restore the relationship with Cambodia. Most Thai people do not want the conflict to escalate, he added.
Mr Payungsak said the industrial sector was not worried too much about the fighting as it was occurring in a limited area and he believed Thailand and Cambodia would be able to avoid an escalation.
FTI deputy chairman Thanit Sorat, secretary-general of the Thai-Cambodian Business Council, said the impact of the fighting had so far been limited to border trade at Chong Chom and Chong Sangam border crossing points in Surin.
The border trade value there accounted for only seven per cent of the total, and that was not that much, he added.
He expected the trade along the Thai Cambodian border, including Aranyaprathet and Klong Luek checkpoints in Sa Kaeo and Klomng Yai checkpoint in Trat would substantially increase, to about 100 billion baht in 2011.
The border trade was valued at 79 billion baht last year, with Thailand benefitting the most with a 65 billion baht trade surplus.
Major products exported to Cambodia included finished oil, refined sugar, cement, fruits and food products. Thailand is the 15th largest investor in Cambodia, where the major investors are Taiwan, China, South Korea, Hong Kong, Vietnam and Malaysia, according to the FTI.
http://www.bangkokpost.com/business/economics/234279/bot-forecast-4-1-growth
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