Thai economic growth picks up: official data

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Thai economic growth picks up: official data
AFP News 2011-05-23

BANGKOK, May 23, 2011 (AFP) - Thailand's economic growth accelerated to the quickest pace in a year in the first quarter of 2011, helped by surging exports, official data showed Monday.

Gross domestic product (GDP) expanded 2.0 percent compared with the previous quarter, and by 3.0 percent from a year earlier, the government's economic planning agency said.

In October-December the economy grew by 1.3 percent quarter-on-quarter.

The agency maintained its forecast for 2011 GDP growth of 3.5-4.5 percent.

With inflation also soaring, the robust figures added to expectations that Thailand's central bank will increase the official cost of borrowing again soon in an attempt to prevent the economy overheating.

"The Bank of Thailand will raise the interest rate again on June 1 and then wait and evaluate the economic situation before making another decision," said Thanachart Bank economist Pichai Lertsupongkit.

The central bank raised its benchmark interest rate for the sixth time in less than a year in April, in an attempt to curb inflation in the face of higher commodity prices. Inflation hit 4.04 percent last month.

The central Bank of Thailand has lifted its key rate by a total of 150 basis points since July 2010, to 2.75 percent.

The Thai economy returned to growth in the fourth quarter of 2010 on the back of its solid exports and private consumption, snapping out of a brief technical recession.

The Thai economy remained relatively resilient in the face of violence in Bangkok in April and May of last year sparked by mass opposition street protests that paralysed the retail heart of the city and scared off tourists.

The strong growth figures could provide a fillip to Prime Minister Abhisit Vejjajiva and his ruling coalition as they gear up for what is expected to be a tough election set for July 3.

But economic prospects are clouded by renewed concerns about the health of the global economy and the ripples from Japan's earthquake-tsunami disaster, which has led to a slowdown in Thai auto production due to a parts shortage.

"Thailand's economic outlook will be clearer in July after the election, but I think growth will be sluggish," said Pichai. "Supply disruptions from Japan are lasting longer than expected, which will definitely affect growth."