Q4 economic growth 'to decrease'
Bangkok Bank predicted Thai economic growth in last year's fourth quarter would slow to 4.3 per cent, down from 4.7 per cent in the previous quarter, due to a steady reduction of demand in the private sector. Private investment has declined to its lowest rate since 1999.
Government spending has been adjusted downwards because of the delay in budget disbursement during this fiscal year, which started last October. Bangkok Bank's macroeconomic research centre said declining investment growth was offset by satisfactory export growth. It predicted the overall growth rate for last year should be about 5 per cent. Economic indicators in the fourth quarter showed private-sector investment and consumption continued to slow down, growing only 1.2 per cent. Sales of major items like cars, motorcycles and imported goods were still sluggish in the fourth quarter. Aside from the downward cyclical pattern, the economy in the fourth quarter was also affected by oil prices and the relatively high level of interest rates. Investors slowed their spending out of concern for the political situation. The government's budget is unlikely to boost the economy in the short term, because disbursement is behind schedule. Besides, the government's spending in the fourth quarter dropped 17.4 per cent compared with the same period in 2005. The centre said exports drove the economy throughout last year. They rose 19.7 per cent in the fourth quarter in US-dollar terms, or 6.7 per cent in baht terms, compared with 16.3 per cent in the previous quarter. Meanwhile, imports grew only 7.2 per cent, reducing by 4.4 per cent in baht terms. The centre said export growth had little impact on consumers in general. Of the top 10 exporting industries, only the rubber and jewellery sectors registered an increase in employment. The Confidence Index of consumers remains low, the centre added.
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