Thai government urged to increase investment amid stronger baht

BANGKOK, March 3 (TNA) - As Thai currency is appreciating against the US dollar, prominent economists have suggested that the Thai government increase its investment, aimed at balancing the Thai economy and stimulating the national economic growth. One of the economists, Chalongphob Sussangkarn, a distinguished fellow of Thailand Development Research Institute (TDRI), acknowledged that the strengthening of the baht has affected Thai exports, which have accounted for up to 75 per cent of the country's gross domestic product (GDP) so far. Therefore, Chalongphob recommended, it is necessary for the Thai government to increase its investment to drive ahead the national economy by importing more capital goods and machines for its new mega-water management and infrastructure development programmes. Chalongphob assessed that the Thai economy could keep growing by 7 per cent annually if the government invested about 4 trillion baht over the next seven years. Admitting that it is difficult to manage the baht in short-term under the flexible foreign exchange system, Chalongphob suggested that the Bank of Thailand (BOT) use combined monetary measures, including its policy interest rate, foreign exchange reserve requirement and capital control, rather than focusing on policy interest rate alone. According to private-run Kasikorn Research Center (KRC), the baht stood at 29.75 against the US dollar on Friday, compared to 29.81 baht per dollar a week ago. The Bangkok-based research firm forecast that the baht would move around 29.60-29.90 against the dollar next week. Meanwhile, the Thai Ministry of Commerce reported that a total of 34 foreign business operators with their combined capital of about 1.7 billion baht were allowed to open their businesses in Thailand last month. Ittipol Changlum, Deputy Director-General of the ministry's Department of Business Development, told reporters today that the foreign businesses would employ more than 409 Thai workers, and that, when compared to the corresponding period of 2012, the number of foreign business operators in Thailand rose 13 per cent; while combined investment soared 629 per cent due to high investment by lending and debt guaranteeing firms when compared to a year ago. (TNA)