Economic growth in Thailand, Indonesia and Malaysia is expected to accelerate or remain stable this year, the United Nations said yesterday.

East Asian economic growth will remain buoyant in 2007, continuing at the pace of 7 per cent, not much below last year's strong performance of 7.7 per cent, said Shamika Sirimanne, chief of the socioeconomic analysis section in the UN Economic and Social Commission for Asia and the Pacific.

Sirimanne presented a report on the world economic situation and prospects for 2007 to reporters in Bangkok.

China's economy continues to lead economic growth in the region, driving up the average and creating positive spillover effects. Growth in East Asia, excluding China, was 5.3 per cent last year, but is expected to slow to 5.1 per cent this year because of weaker export growth in the overall slowing global economy.

Sirimanne said growth in Thailand and other countries in Asean would be supported by a rebound in private consumption in Indonesia as monetary policy is loosened, and by continued healthy domestic consumption growth in the other countries.

She said investor confidence was important for a recovery of private investment in Thailand. Thai authorities should not implement policies that would have an adverse effect on confidence, she said.

Confidence in the Thai economy has been shaken since the central bank imposed capital controls in December, followed by a string of bombs in Bangkok on New Year's Eve. And now the government has slapped more restrictions on foreign investment.

Asian growth momentum had already slowed somewhat in the second half of last year as tightening measures started to bite in China.

The global electronics cycle showed initial signs of weakening and commodity prices started to ease. It is expected that these trends would continue.

The stellar investment growth in China in the first half of last year has raised renewed worries about an overheating of the mainland economy.

The observed investment slowdown in the second half of last year will likely continue, as the Chinese government puts an increased emphasis on a more equitable and sustainable growth path. This will result in a reduction of China's gross domestic product growth to about 9 per cent this year.

The report sees growth in the newly industrialised economies (NIEs) also slowing this year, as the global electronic cycle continues to weaken and export growth decelerates. However, domestic demand in South Korea is slowly recovering from its slump of the two previous years, while domestic demand in the other NIEs is expected to compensate as unemployment decreases and private consumption rises.

Wichit Chaitrong

The Nation