The state planning agency predicted growth next year of between 4 to 5 per cent.

Gross domestic product (GDP) - a broad measurement of economic health - rose to 5.3 per cent in the first nine months of the year, up from 4.5 per cent in the same period last year, Ampon Kittiampon, secretary of NESDB, said.

The 4.7-per-cent GDP growth in the third quarter was slower, compared with 5 per cent in the second quarter and 6.1 per cent in the first quarter, he said. Seasonally adjusted GDP rose from 1.1 per cent in the second quarter to 1.5 per cent.

Meanwhile, the Office of Industrial Economics forecast the industrial index would grow 7.5 per cent and GDP in the sector would grow 5.5 per cent next year.

Due to the appreciation of the baht, total export value is predicted to decline in the coming year. However, total value of domestic consumption and investment will increase thanks to the fall in the price of oil and lower interest rate.

Industries this year have achieved capacity utilisation of 70 per cent, increasing slightly from 68 per cent last year.

The Office said that although mega-projects were delayed this year, the metal industry may record good growth in the last quarter because of rising demand for metal after floods in many areas.

The automotive and electronic industries have recorded the best performance this year.

The NESDB predicted agricultural production would increase by 5.2 per cent in the third quarter, down from 7.1 per cent in the previous quarter. Crop production was affected by the typhoon while livestock grew less rapidly due to disease in swine and chicken.

Non-agricultural sectors slowed down slightly from a 4.9-per cent expansion in the second quarter to 4.7 per cent between July to September.

Exports were still the engine for growth in the third quarter. The trade and services balance at current market prices registered a surplus of Bt101.6 billion between July to September and the current account surplus was Bt86.2 billion, he said. However, the current account showed a deficit of US$342 million in the first nine months of this year, said Ampon.

Household consumption grew by 2.9 per cent in the third quarter, better than the expected expansion of 2 per cent, but lower than the 3.3 per cent in the previous quarter, said Ampon.

Investment expanded by 3.2 per cent, better than the forecast 3 per cent. Public and private investment grew by 3.8 and 2.9 per cent respectively.

Many private firms postponed their investment due to political uncertainty, while the government delayed many mega-projects.

The fall in crude oil prices in the third quarter was positive for economic growth. Crude oil prices in the Dubai market stood at around $62-$63 a barrel, lower than the previously estimated $65-$68 a barrel. Inflation also eased in the third quarter, as the consumer prices index went up by 3.3 per cent, compared with 6 per cent in previous quarter.

The NESDB revised upwards estimated GDP growth for this year to 5 per cent from the previous projection of 4.7 per cent. The easing of high oil prices, lower inflation and robust exports are all expected to boost growth for the rest of the year, Ampon said.

The NESDB forecast that GDP would grow 4 to 5 per cent next year. The expected slowdown in the world economy would affect Thailand's exports next year. Exports in dollar terms are expected to grow by 9 per cent next year compared with a projection of 16.8 per cent this year.

"GDP next year would likely grow between 4.5 to 5 per cent," Ampon said.

As the government plans a budget deficit of Bt142 billion, it would compensate slowdown of exports, he said.

Investment is expected to grow 6.2 per cent, compared with the estimated 4.3 per cent this year. Household consumption would moderately grow 3.8 per cent from 3.5 per cent this year. Inflation would be 3 to 3.5 per cent, down from an expansion rate of 4.6 per cent this year.

Interest rates are expected to be stable or down towards the latter part of the next year. He said the predictions assumed exchange rates of around Bt36-37 per US dollar.

The planning agency's GDP projection for next year is close to the growth rate of 4.6 per cent predicted by the World Bank, while the Bank of Thailand is more optimistic and predicts 4.5 to 5.5 per cent growth next year.

Wichit Chaitrong

Chalida Ekvitthayavechnukul

The Nation