UNCTAD:Thai economy is strong enough to cope with relieved QE

BANGKOK, August 29 (TNA) - The United Nations Conference on Trade and Development (UNCTAD) says that the Thai economy is strong enough to cope with the relieved QE policy of the United States, recommending, however, that the Thai economy be restructured to be independent. Visiting UNCTAD Secretary-General Supachai Panitchpakdi, who is also a former director-general of the Geneva-based World Trade Organization (WTO), told the "Thailand Focus 2013" forum in Bangkok on Thursday that an approaching plan by the US Federal Reserve (FED), the US central bank, to ease its quantitative easing (QE) policy should only have short-term impacts on the domestic money and stock markets. Supachai, who is also Thailand's former deputy prime minister and ex-commerce minister, pointed out that 80 per cent of increases in asset prices in Asia have resulted so far from QE liquidity and only 20 per cent from productivity. Supachai viewed that the withdrawal of the liquidity should, thus. allow Asian countries, including Thailand, to see their real economic fundamentals and realize the necessity to improve their productivity, education, transport, customs regulations, researches, workers' skills, governance and management in order to attract more foreign direct investment (FDI) with their stronger economic fundamentals. The UNCTAD chief assessed that the growth rate of the Thai economy might drop by a certain extent, but it should be stronger in the long run. The UNCTAD chief suggested that the Thai government invest in enhancing national productivity, through increased private investment, which will lead to the sustainable growth of the Thai economy, elaborating that such investment will not affect public debts because it will generate people's incomes, jobs and long-term national economic returns. The UNCTAD secretary-general also recommended that Thailand reduce its dependence on exports to China because China is reducing its export-based trade surplus to, instead, emphasize on its domestic consumption, urging Thailand to, therefore, turn to focus more on domestic production and consumption to stimulate national economic growth. (TNA)