Focus on key sectors, Govt told

Somjai Phagaphasvivat

Economic experts urged the government to speed up strengthening the country's competitiveness, saying that while Thailand may avoid hardship because of the global recovery, it could lose ground to regional rivals.

Analysts spoke at a seminar entitled "Future of the Thai Economy: Looking at Alternatives for Survival", held by the Stock Exchange of Thailand. They believed the economy would improve in the second half thanks to lower inventories and global moves to boost consumption and investment.

One speaker, economic and political expert Prof Somjai Phagaphasvivat said exports would be stronger than the first half as demand would rise in main markets such as Europe, Japan, Asean and China .

"Due to the fiscal and monetary policy, the Strong Thailand campaign, and more confidence in the private sector, I believe our economic growth will return to 2-3 per cent next year," he said.

But he feared that the flu pandemic could be a problem in the winter and slow down the economic recovery.

He said there would not be aggressive growth for a few years as the government sought mainly to spend its budget to boost the economy but had not focused on lifting the private sector's potential or competitiveness.

"The government should consider which industries it wants to promote as the country's core industries and which industries it should support to go and gain benefits from other countries. It's time for us to adjust our economic structure," he said.

Kobsak Pootrakool, an executive with the Bank of Thailand's Monetary Policy Strategy Division, said the global economy might recover more slowly than expected because consumers in the US and Europe would be more careful about their spending.

So, it would be difficult to boost exports to levels seen before the global slump.

Besides concerns about political instability, he said the government needed to reconsider measures in case the economy slows again.

"We can transfer investment capital easily, so it's not a good idea that the Strong Thailand campaign stimulates investment rapidly without lifting national competitiveness in the long run," he said.

Payungsak Chartsutipol, vice chairman of the Federation of Thai Industries (FTI), said the economy was likely to pick up from the first half but it was unclear how strong demand would be in the recovery.

He said capacity utilisation in most industries had risen to 60 per cent, plus 80-100 per cent in some sectors such as petrochemical and rubber.

He said the new investment would be low in this period, as most companies with strong financial status preferred to take over or acquire cheap businesses.