NESDB cuts growth estimate

Thai News Agency.

The National Economic and Social Development Board has revised its economic growth estimate for this year downward by half a point saying oil prices, the general election and electric train route construction will have an influence on the economy..

The board said it now believes the economy will grow by 4-to-4.5 per cent, down from 4-to-5 per cent forecast earlier,.

NESDB Secretary-Genearl Amphon Kitti-amphon said the economy in the first quarter of this year grew 4.3 per cent, equal to that of the fourth quarter of last year..

However, many figures showed a continued slowdown from last year since household spending in the first quarter expanded only 1.3 per cent compared with 2.5 per cent in the previous quarter..

The overall investment contracted 1.4 per cent compared with a growth of 2.4 per cent in the fourth quarter of last year because private investment contracted 2.4 per cent compared with a 2.3 per cent growth in the previous quarter..

The unemployment was still as low as 1.6 per cent compared with 1.9 per cent in the same quarter the year before..

An inflation rate dropped to 2.4 per cent from 3.3 per cent in the first half of last year..

The trade balance was still in deficit of US$5.5 billion although there was a sign of more imports in April..

He said public debts as of the end of March stood at 3.21 trillion baht or 38.10 per cent of the gross domestic product (GDP), down from 40.48 per cent as of the end of December last year..

The international reserve as of the end of April stood at $71.7 billion..

Given these figures, NESDB projected the economy for this year would expand 4-4.5 per cent, down from 4-5 per cent estimated in March, since many factors had changed..

The Bank of Thailand’s move to cut the policy interest rate to 3.5 per cent would make commercial banks to follow suit, which could help boost private spending and investment..

He said exports would remain a key factor to the economic recovery as it enjoyed a growth of 18.5 per cent in the first quarter because the demand in major export destinations remained high..

In addition, state spending would be another driving force since 51.74 per cent of the budget had been disbursed so far..

He said the baht appreciation by 9.5 per cent in the first quarter would make imported product prices weaken in the baht term, but it would affect revenue earned from exports and tourism..

Higher oil prices needed to be closely monitored because it could have an impact on the economy..

The NESDB chief the private consumption and investment had been affected by declined confidence..

Therefore, whether the economy would grow as expected depended on the constitution drafting, the general election, the construction of electric train routes, southern unrest, and the increase in the budget deficit..

Mr. Amphon said NESDB forecast this year the inflation rate would stay at 2-2.5 per cent, and the current account and trade surpluses would be $8.5 billion and $7.7 billion..

The exports are projected to be $144.1 billion, up 12.4 per cent while imports to be $136.4 billion, up 8.3 per cent..

The private and state investment is expected to expand 1.5 per cent and 4 per cent respectively..