ADB:Thai economy is likely to grow by 4.5% in 2015

BANGKOK, April 1 (TNA) - The Asian Development Bank (ADB) has predicted that the Thai economy should grow by 4.5 per cent next year, on top of nearly 3 per cent this year. The ADB projection was announced on Tuesday by Luxamon Attapich, ADB senior economist in Thailand, who elaborated that domestic consumption and investment are foreseen to recover next year when domestic political situation relieves. Luxamon anticipated that the next Thai government would speed up state budget disbursements and drive the Thai economy to expand by 4.5 per cent in 2015. Luxamon said, however, that the Manila-based ADB has revised the Thai economic growth rate to 2.9 per cent this year, the same rate of the Thai economic expansion last year, from 4.5 per cent forecast earlier. According to the ADB senior economist, the projected figure is based on the condition that the new Thai government is formed and can function completely in the second half of this year. Unless there is the new Thai government by the third quarter of this year, the ADB senior economist cautioned, the Thai economy may grow by less than 2 per cent this year, noting that the ongoing domestic political deadlock shakes the confidence of international tourists, local consumers and business operators and affects domestic consumption and investment. Besides, consumption in the Thai private sector is also affected by delayed payment to farmers under the government’s rice-pledging scheme and uncertainty of the scheme in the future, while huge household debts, amounting to 80.1 per cent of Thailand's gross domestic product (GDP) at the end of the third quarter last year, have continued to limit the growth of consumption in the private sector at only 1.5-2 per cent. The ADB senior economist acknowledged that her bank is monitoring Thailand's GDP in the first quarter of this year, as key economic figures were disappointing in the first two months of 2014 and the ADB wishes there will be a positive sign of the Thai economy in the second quarter this year. The ADB also projected that investment in the Thai public and the private sectors should expand by 1-1.5 per cent this year, as the government's mega-investment projects have been delayed after the Constitutional Court ruled recently that the government’s 2.2-trillion-baht borrowing bill to fund the new mega-infrastructure development projects, mostly in the transport sector, is unconstitutional. Thai exports are predicted to, however, grow by 5-5.6 per cent this year, thanks to the economic recovery of Thailand's major trading partners, like the United States and Europe, and the depreciation of the Thai baht. The ADB senior economist pointed out that Thailand's predicted economic growth rate at 2.9 per cent this year is the lowest level in Southeast Asia, as the economies of the Philippines, Indonesia and Malaysia should grow by 6.4 per cent, 5.7 per cent and 5.1 per cent respectively. (TNA)