The Kingdom's quarterly economic growth slumped to its lowest record in 2001, at 1.7 per cent.

Thanawat Polvichai, director of the Economic and Business Forecasting Centre, said economic growth in the third quarter this year should not drop below 2 per cent.

Consequently, the university will officially revise its prediction of year-end economic growth next month. The figure could be lower than 4 per cent, from the current forecast of 4-4.5 per cent, he said.

Predictions concerning the country's economic prospects were based on seven negative factors. These are the recent slow-down in the world's economy, rising global oil prices, effects from the baht's appreciation, a fall in sales value in key industries, a drop in both domestic and foreign investment, loss of consumer confidence and a slow-down in domestic consumption.

A few positive factors helping maintain economic growth include lower inflation leading to falling interest rates and a drop in the jobless rate to 1 per cent early this year.

Business sectors that will remain unchanged include soy milk, beverages, soap, washing machines and rubber sheets. Sectors that will fall to slight growth are rice mills, craft paper, petrochemicals, textiles, cement and computers. Luxury goods, garments, wood furniture, tyres, steel, rubber, fresh dairy products, zinc, motorcycles and electronic appliances will show a significant drop this year.

Thanawat predicted the economy would recover in the late third quarter if the government accelerated economic growth by speeding up budget disbursement to the grass roots, launching mega-project bidding, cutting interest rates, stabilising the value of the baht and increasing understanding of business law.

Additionally, the survey, based on 1,200 respondents, predicted people would slow down their consumption of luxury goods, property and household and electronic appliances this year.

Petchanet Pratruangkrai

The Nation