• 
• 
• 

The central bank has revised its forecast 2009 growth in gross domestic product to 0-2 per cent from 0.5-2.5 per cent.

The economy could register a year-on-year contraction for three consecutive quarters - beginning from the final quarter of last year - and negative growth in headline inflation for three straight quarters, it said. Given the weakened state of the global economy, growth in Thai exports of goods and services could also fall beyond the baseline scenario of minus 5.5 per cent to minus 8.5 per cent.

The domestic economy will be driven by government spending, projected 13- to 15-per-cent growth in consumption and investment, and an estimated hike of 1.5-2.5 per cent in private consumption - but without expansion in private investment.

"Thai economic growth could be lower than zero, but there is a very low probability of that happening," said Bank of Thailand Assistant Governor Duangmanee Vongpradhip.

The economy is largely dependent on the global economy, which is projected to pick up in the middle of the year in the baseline scenario and the end of the year in the worst-case scenario.

Stimulus packages - notably Bt116.7 billion from the central budget - will boost private consumption and investment, and in turn overall growth.

"A Thai economic recovery depends tremendously on a global economic turnaround. The world economy could pick up by the end of this year, but it could happen later. If that were the case, it would have an adverse impact on our economic projection," said Duangmanee.

It is unclear how effective the US stimulus package will be, as it depends on market response and confidence. In the worst-case scenario, the US economy would contract by 3.1 per cent, she said.

The BOT insisted that the economy would not slide into recession or technical recession - defined as quarter-on-quarter negative growth for two consecutive quarters.

Although the economy will mark a quarter-on-quarter contraction in the final quarter of last year, it will register positive growth this quarter, Duangmanee said.

The central bank also insisted that the Kingdom would not encounter deflation despite a contraction in headline inflation in some months.

The assistant governor said only oil prices had been dropping, negative growth in inflation would not persist and the bank's inflation expectations remained unchanged.