|
The Fiscal Policy Office
(FPO),
Ministry of Finance, announced that the Thai economy for 2009 |
Nonetheless, the Thai economy still
faces the risk
from the slow recuperation of private
domestic spending, both consumption and investment. On the other
hand, internal economic stability is
expected to improve, given that inflation is projected to
decline to -0.8
percent per year, following oil price
which decreases significantly compared to last year as well as
the
tendency of stronger Baht. The projection
of unemployment rate has an improving trend of 1.8 percent of
total
labor force, as the re-employment rises
following the better expansion of the Thai economy in the second
half
of the year. As for external stability,
current account in 2009 is projected to record a large surplus
of 8.0 percent of GDP, as import value shrinks more than export
value.
The Thai economy
for 2010 is forecasted to expand at 3.3 percent per year (or
within the range
of 2.5 - 4.1 percent per year), with the
expansionary fiscal policy continuing from late 2009 from public
expenditures under the “Thai Khem Khaeng”
plan as the major drive, along with the revival of private
expenditures that would exhibit an
improving trend from the low base in 2009. Meanwhile, export of
goods and
services in 2010 is forecasted to grow as
the economy of major trading partners recovers. As for internal
economic stability, inflation is projected
to rise to 2.5 percent per year (or within the range of 2.0 -
3.0 percent per year), following increasing oil price compared
to 2009. For external stability, current account in 2010 is
projected to record a smaller surplus of 4.0 percent of GDP (or
within the range of 3.7 - 4.6 percent of GDP), as the revival in
domestic demand would cause faster expansion of import value
than export value.
Details of the economic forecasts are
as follows:
The Thai economy in
2009
1.1 Economic Growth
The Thai economy in 2009 is forecasted to
contract by -3.0 percent per year. This is attributed to
the sharp contraction of the economy in
the first half of the year as a result of Global economic crisis
that causes a marked fall in export volume of goods and
services. Although the recovery trend of the global economy
would play a positive role to the export of goods and services
in the second half of the year, export volume of goods and
services in 2009 is still forecasted to considerably shrink at a
high rate of -14.8 percent per year. Import volume of goods and
services, on the other hand, is forecasted to decline by -22.2
percent per year, as export and domestic spending subside. In
particular, private investment is projected to contract by -13.7
percent per year, as investors delay their investment decision
following the drop in foreign and domestic purchase orders.
Despite the improving tendency of domestic consumption as a
result of better private income following an increase in
employment and the Government’s
Stimulus Package 1 that helps supporting income and reducing
household expense, the sharp contraction in private spending the
first half of the year would cause average private consumption
in the year 2009 to shrink at the rate of - 1.0 percent per
year.
The major factor that would alleviate
the contraction of the Thai economy when private spending
does not yet fully recover is the accelerated disbursement of
government expenditures to reach the target. In
particular, the quick implementation of
the “Thai Khem Khaeng” plan has to continually help driving the
economy during the remaining of the year. Government consumption
growth in 2009 is projected to accelerate to 6.4 percent per
year, while public investment growth is projected to increase to
5.3 percent per year.
1.2 Economic Stability
Internal economic stability is expected to
improve, with headline inflation in 2009 forecasted to fall
to -0.8 percent per year. This is due to
the falling crude oil price, which is expected to deeply drop
from 2008 level, along with the appreciating Baht. Core
inflation, which excludes energy and food prices, is projected
to fall to 0.4 percent per year, partly due to the continuation
of the Government’s measures that help lowering cost of living.
Unemployment rate has an improving trend of 1.8 percent of total
labor force, as the re-employment rises following the better
expansion of the Thai economy in the second half of the year. As
for external stability, current account in 2009 is projected to
record a large surplus of 8.0 percent of GDP, as trade balance
reaches the high surplus of 20.5 billion USD. This large surplus
is due to the greater fall in import value relative to export
value. Import value is forecasted to contract from the high base
of last year at -28.8 percent per year, while export value is
projected to decline at -17.2 percent per year.
2. The Thai
economy in 2010
2.1
Economic Growth
The Thai economy for 2010 is forecasted to
expand at 3.3 percent per year (or within the range of
2.5 - 4.1 percent per year), with the
government spending under the fiscal deficit framework at 3.5
percent of GDP as the major drive, along with the Government
investment expenditures under the “Thai Khem Khaeng” plan.
Public investment is thus forecasted to accelerate to 8.2
percent per year (or within the range of 5.2 – 11.3 percent per
year), while public consumption in 2010 is projected to expand
at the rate of 4.8 percent per year (or within the range of 4.0
– 5.7 percent per year.) In addition, the recovery of private
expenditures that has an improving trend from the low base in
2009 would play a supporting role. Private consumption is
forecasted to grow at 4.2 percent per year (or within the range
of 3.7 – 4.7 percent per year), as household income recuperates
following the recovered economy, coupled with the employment and
work hours that would resume the normal level. Private
investment in 2010 is projected to expand from the low base to
6.6 percent per year (or within the range of 2.7 – 9.0 percent
per year), as the public investment under the “Thai Khem Khaeng”
plan would cause the Crowding-in effect for private investment.
Meanwhile, export of goods and services in 2010 is forecasted to grow at 5.6 percent per year (or within the range of 4.8 – 6.7 percent per year), as the economy of major trading partners recovers, along with the low base of last year. The growth of import volume of goods and services is projected to accelerate to 12.4 percent per year (or within the range of 10.6 – 14.2 percent per year), as a result of the recovery of domestic spending and the rise in export.
2.2 Economic Stability
In terms of internal economic stability,
headline inflation in 2010 is projected to rise to 2.5 percent
per year (or within the range of 2.0 – 3.0
percent per year), as the global oil and agricultural prices are
expected to rise following the recovery of the global economy.
Unemployment rate is expected to resume its normal level at 1.3
percent of total labor force (or within the range of 1.0 – 1.5
percent of total labor force.) As for external stability,
current account is projected to fall, yet still record a surplus
of 4.0 percent of GDP (or within the range of 3.7 – 4.6 percent
of GDP.) This is due to the fall in trade surplus to 9.7 billion
USD (or within the range of 8.7 – 11.1 billion USD), as the
value of import grows at the faster pace than export value.
Export value is projected to grow at 10.0 percent per year (or
within the range of 9.0 – 11.4 percent per year) following the
revival of the global economy.
Import value is forecasted to grow at 19.5 percent per year (or within the range of 17.0 – 21.9 percent per year), as domestic demand speeds up and import order for export-oriented manufacturing rises.
