In making its forecast, the central bank is less worried about domestic factors than external ones, particularly the issue of how the “fiscal cliff” scenario in the United States will play out. Uncertainty in the European Union economy has declined, while foreign fund flows should be closely monitored in the wake of Japan’s recent leadership change, he said.
Growth in Thailand’s gross domestic product will be supported by the government’s acceleration of budgeting for infrastructure projects, which will in turn boost private investment, Methee said.
“The central bank will monitor the inflationary effects of the nationwide implementation of the higher daily minimum wage on January 1, but the move is not expected to affect inflation as much as previously feared,” he said.
The BOT yesterday announced that GDP grew in November from the month before thanks to strong domestic consumption and investment.
Methee added that domestically, there were almost no serious risk factors facing the Thai economy next year. Therefore, it is possible that GDP could register growth of more than 4.6 per cent, driven by domestic consumption and private investment.
If the state agencies boost spending, it will stimulate spending by the private sector, including investment in infrastructure. Possible risk factors include political instability and the impacts of the Bt300 daily minimum wage, the director said.
The country’s economy expanded last month on spending by the private sector and domestic consumption, while the export situation improved. The consumption index for the private sector expanded 1.8 per cent from October.
Private-sector investment also expanded 1.8 per cent month on month in November, thanks to investment in machinery to boost production to serve the rising consumption.
Looking at interest rates, Barclays Research, convinced that the Thai economy will continue to prosper in 2013, believes the BOT’s policy rate will be kept unchanged unless the global economy experiences a severe downturn that affects the recovery in exports.
The BOT’s Monetary Policy Committee will hold its first meeting of 2013 on January 9.
“We believe incoming global indicators will heavily influence the central bank’s reaction function, but the bar for further monetary easing has been raised significantly,” Rahul Bajoria, an analyst at Barclays, said in a research note.
Export value in November rose 6.7 per cent from October to US$19.332 million (Bt591.85 million). Excluding gold, export growth for the month was 7.8 per cent, led by electronics products. Exports of agricultural products shrank, mainly because of a drop in rice exports.
Exports are expected to stabilise or improve from here on, Methee said.
Imports in November were worth $18.705 million, down 1.9 per cent from the previous month. Excluding gold, imports grew 5.2 per cent month on month, led by imports of raw materials and capital goods.
The picture for the tourism sector was also rosy. The number of inbound tourists stood at 2.1 million, up 6.3 per cent on a monthly basis.
Unemployment remained low, while headline inflation in November was 2.74 per cent and core inflation was 1.85 per cent. Core inflation excludes food and energy prices.