UTCC predicts 3.2% economic

All three show a sharp turnaround from this year's project¬

ed contraction of 3.1 per cent.

The 3.2-per-cent prediction is based on political stability, or

at least parliamentary dissolution under democratic means;

the more than Bt100 billion in suspended investment in Map

Ta Phut being unlocked; the global economy growing by 3 per

cent; and interest rates increasing by no more than 0.5 per¬

centage point in the first half of the year.

Other assumptions used were that conditions for reim¬

bursement under the government's Bt1.43-trillion Thai

Khemkhaeng programme should be clear in the second half of

the year; farm prices will increase from 2010 to 2012; oil

prices will not exceed US$85 (Bt2,820) per barrel on average

in the first half of next year, and will be no more than $100 in

the second half; the baht should be quoted at 32.5 per dollar

on average, thus enabling tourism growth of 10 per cent; and

the unemployment rate will fall from 1.2 per cent to 0.9 per

cent.

The second UTCC scenario predicts growth of 2.5 per cent,

based on the global economy rebounding at a slower rate and

a continuation of the uncertain domestic political scene. In

addition, the Map Ta Phut problem will remain unsolved and

there will be another wave of the type-A (H1N1) influenza pan¬

demic.

This scenario implies the Kingdom's exports will grow by 8.1

per cent and that unemployment will increase by 1.1 per cent.

Under the final scenario, which the UTCC forecasting centre

said was the least likely of the three to happen, the economy

will grow by 4 per cent based on faster global economic

expansion.

In this case, exports should grow by 12.1 per cent, the baht

should average 32 per dollar and unemployment should drop

to 0.8 per cent.

Thanavath Phonvichai, director of the forecasting centre,

said major importers such as the US and the European Union

were facing a high unemployment rate of 10 per cent. This will

affect economic expansion, besides which political uncertainty

in Thailand and the Map Ta Phut controversy have created a

negative psychological effect on foreign direct investment.

The centre yesterday also released data on Thailand's aver¬

age household debt, which - according to a survey conducted

during November 6-16 - increased by 2.8 per cent to

Bt147,000.

In the same period, loan-shark debt increased from 42.6

per cent of overall household debt to 57.4 per cent.

"This is the first time that people's loan-shark debt was

higher than organised debt, and this requires the government

to urgently handle this problem," Thanavath said.

The government's debt-refinancing project for those in hock

to loan sharks, which kicked off yesterday, will allow debtors to

pay a lower interest rate via state banks.