NESDB: Growth likely to be at least 2%

The National Economic and Social Development Board (NESDB) has forecast the Thai economy will grow by at least 2% this year now that political stability has returned.

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Deputy NESDB secretary-general Porametee Vimolsiri shared the information at a seminar held by the Economic Reporters Association in Bangkok on Saturday.

The forecast was a 0.5-percentage-point increase from its previous prediction on May 19, three days before the coup.

Mr Porametee said back then the estimation had taken into consideration the facts that the past government had been unable to implement economic policies, work out the 2015 budget or spend investment budgets of fiscal 2014.

He said after the coup, consumer confidence started to improve, investment slated for fiscal 2014 could be implemented and the 2015 budget was likely to start on schedule this October.

Mr Porametee also said exports continued to be an important driver of the Thai economy, accounting for 75% of gross domestic product.

If the export value in US dollar terms increases by 3-5% this year, the Thai GDP can grow by 2.5% this year, he said.

In the first five months of this year, the export value dropped by 0.2% year-on-year but the figure in June alone rose by 7.2%.

To achieve the export growth rate of 3-5% this year, the value must expand by 6-7% monthly in the second half of this year, a possible scenario given the low base in the same period last year and the baht depreciation, Mr Porametee said.

However, he said Thai exports failed to catch up with the world economic recovery pace, possibly because they became less competitive in global markets.

The eroding competitiveness was possibly due to technological application by overseas manufacturers and the fact that the severe flooding in 2011 had led some trade partners to seal long-term purchase contracts with other countries instead of Thailand.

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