THE JOINT Standing Committee on Commerce, Industry and Banking (JSCCIB) has expressed confidence that surging tourism and domestic investment would enable the Thai economy to achieve 4 per cent growth this year.
After the JSCCIB meeting yesterday, Chen Namchaisiri, chairman of the Federation of Thai Industries (FTI), said the Thai economy was expected to continue its growth trend in the second half of the year.
This comes on the back of third-quarter exports, which were higher than expected, recovery in Thai tourism following an influx of Chinese tourists, and improvement in private and public investment.
Although the recent floods affected the Thai economy, particularly the agricultural sector, the government’s relief measures were expected to boost economic growth as forecast, he said.
The JSCCIB forecast gross domestic product (GDP) to expand in a range of 3.7 to 4 per cent and exports growth at 6.5-7.5 per cent. Inflation is estimated at 0.5-1 per cent.
The world’s “major economies continue to see rise in their economic indicators and, thus, the global economy will likely continue its expansion for the rest of this year and 2018”, Chen said.
The developments were in line with International Monetary Fund’s decision to revise up its forecast for global growth next year, led by the United States, he said. The US is expected to see its fiscal measure to pass the US Senate and stimulate its economy next year.
However, challenges existed in other key economies including the European Union and China, which were expected to see slower growth rates next year, he said. The baht also tends to be volatile which could pressure Thai exports in the next periods, he added.
Meanwhile, the Bank of Thailand’s Monetary Policy Committee (MPC) is expected to leave the policy rate unchanged at 1.50 per cent at its meeting today, according to Kasikorn Research Centre.
The MPC would likely signal a low-interest-rate environment to facilitate the economic recovery, while external financial stability remains strong to cope with external volatility and risks, the research house said.
Ariya Tiranaprakit, executive vice president of the Thai Bond Market Association, said that based on the Interest Rate Expectation (IRE) Index, the Policy Rate IRE Index stayed at 48 in November, reflecting market confidence in the MPC maintaining the policy rate due mainly to low inflation, domestic economic expansion and steady global benchmark rates.
Interest Rate Expectation Indices for five-year and 10-year government bond yields through the December MPC meeting stand at 86 and 89 respectively. The indices indicate that bond yields will increase due mainly to declining demand in the bond market, an expected US rate hike, an upswing in the Thai inflation rate and domestic economic growth prospects.