Data for December showed record growth in industrial production and tourism, plus higher agricultural prices that bolstered the economy in the final quarter of 2009, Kasikorn Research Centre (KResearch) said yesterday.
The research house predicts seasonally adjusted gross domestic product for the quarter expanded 1.9 per cent from the previous three months. GDP grew 1.3 per cent in the third quarter.
When compared to 2008, fourth-quarter GDP is forecast to have grown 4.5 per cent, against the 2.8-per-cent contraction seen in the third quarter. This would represent the first positive growth in five quarters.
Due to the likely better-than-expected performance in the fourth quarter, KResearch projects the economy contracted by 2.6 per cent last year, which is lower than previous expectations.
In addition, positive factors driving the economy last year will continue their momentum, pushing the economy well into positive territory again.
KResearch said growth would likely be higher than previously expected, thanks to increased flexibility in the government's economic stimulus measures and continuing increases in farm-produce prices.
Due to these factors, the research house has revised its 2010 growth forecast to 3-4 per cent from the previous 2.5-3.5 per cent.
Regarding the outlook for this quarter, the economy will likely be pressured by many negative factors, especially the increasingly tense political situation, which could slow the revival in spending, tourism and investment. Anxiety over the Map Ta Phut impasse may also damage the investment climate.
However, the situation in the second half will likely improve, KResearch said, thanks to budgetary disbursement for the Thai Khemkhaeng programme, besides other major investment projects.
Moreover, a solution to the problems surrounding Map Ta Phut projects may also have been found by then, while it is expected that an easing of the political conflict will help a more stable, healthy recovery.
The research house sees the main economic risks this year as political uncertainty - a factor that should be closely monitored - and the Map Ta Phut project suspensions.
In regard to the latter concern, KResearch said the government should urgently seek to outline regulations and guidelines in accordance with Article 67 of the 2007 Constitution, and make matters clearer for investors.
Meanwhile, accelerating inflation could dent consumer spending.
On the international front, the global economy should improve significantly, though there are risks in each region. These include high unemployment in developed countries and economic instability in some emerging economies that face bubbles and high debt.
