The central bank believes the tourism industry will recover in six months, based on past experience, and expects the economy to show improvement during the rest of the year, with five major indicators considered.
Bank of Thailand (BOT) Deputy Governor Bandid Nijathaworn yesterday listed the five factors as the global economic momentum, tourism recovery, drought conditions, trends in the policy interest rate and access to funding by small and mediumsized enterprises (SMEs).
He said businesses, especially SMEs, must monitor these indicators closely, so they can adjust quickly to any situation.
Bandid made his remarks at a seminar entitled "Thai SMEs in the Era of a Free Asian Economy", hosted by Bangkok Bank.
He said the first factor was whether the global economy would enjoy a healthy recovery. The US economy has yet to pick up fully, while some European countries are experiencing publicdebt problems.
However, many Asian countries are seeing strong economic growth, so if the US and European economies do not pick up more in the second half, Thai exports will have to focus more on Asian markets.
The second factor is the tourism industry. It recovered in six months after the 2003 Sars epidemic, five months after the 2004 tsunami and seven months after the 200809 political turmoil. It is expected to take six months to recover from the latest round of political turmoil, but that will also depend on the global economy and government measures to entice tourists back to Thailand.
The third factor is the draught, and it remains to be seen how that will play out.
The fourth one is the policy interest rate, which has been kept at a low 1.25 per cent in a bid to boost economic recovery. Many times, the BOT has indicated that if the domestic economy recovers and the global economic crisis abates, it may consider increasing the rate at an appropriate time.
The fifth factor that could affect secondhalf economic growth is SMEs' loan accessibility. SMEs have yet to enjoy full access to loans, which means they still suffer a high cost burden. Bandid said many commercial banks had stepped in to help SMEs gain easier access to loans.
He believes the country's economy will grow 45 per cent this year.
Bandid said while Thailand's economy showed positive growth in the first quarter, the economy was affected in the second quarter by the political turmoil.
Tourism suffered severely from the chaos, but other key sectors were also hurt, such as agriculture, exports and real estate.