IMF:Thai economy has continued recovering

BANGKOK, April 10 (TNA) - The US-based International Monetary Fund (IMF) says that the Thai economy will continue recovering this year, projecting that Thailand’s gross domestic product (GDP) should grow by 3.7 per cent on average in 2015. The GDP projection was announced on Friday, following a meeting between senior IMF and Bank of Thailand (BOT) officials in Bangkok, with the IMF side pointing out the Thai economy to be cushioned by rising private consumption and investment and declining oil prices. But IMF cautioned that private investment in Thailand could face limitation this year due to a slowdown of purchase orders from overseas and an uncertainty of Thai politics. Besides, private consumption is also limited due to high household debt, causing local financial institutes to be cautious in approving new loans, while public investment projects by the government are also delayed and demand for Thai goods overseas is also weak. The IMF-BOT meeting agreed that the Thai economy could grow lower than the projection, caused by impacts of risk factors both internally and externally such as a delay in decision-making by the government, a weakness in the private sector and an uncertainty of domestic politics and a volatility of the global monetary market. However, IMF expressed an agreement with the Thai government’s fiscal policy aimed to stimulate the national economy to sustain the state fiscal status in the medium-term and also agreed with reforms of subsidy measures aimed mainly to assist specific groups of people, especially those having been affected by the government-sponsored rice pledging scheme and the government's subsidy of domestic energy prices. On Thursday, BOT's Director of Macroeconomic Policy Office Don Nakornthab noted that the Thai economy has slowed down since 2006 due to impacts from domestic political issues, frequent change of governments and natural disasters. Don warned if Thai export contraction continued and the national economy did not recover in the second quarter, Thailand's GDP could expand by less than 3.8 per cent this year, possibly by 2.5 per cent. According to the BOT senior official, if the value of Thai exports stood at 17 billion US dollars monthly from now on, Thai exports could contract for the third consecutive year in 2015. The senior official acknowledged that the Thai baht has appreciated by 1 per cent so far this year, while other currencies in the region have depreciated, which has also affected Thai exports. (TNA)