ID :
34977
Wed, 12/10/2008 - 21:10
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https://oananews.org//node/34977
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Thai economy to grow 2% in 2009: World Bank
Thai economy to grow 2% in 2009: World Bank
BANGKOK, Dec 10 (TNA) - The global economic downturn and domestic political uncertainty may continue to weigh on Thailand's growth in 2009, with the World Bank predicting the country's economy will expand by just 2 per cent next year -- the lowest rate since 1998.
In addition, the bank revised its forecast on Thailand's growth in 2008 to 3.9 per cent - down from the 5 per cent it projected in April, Mathew A. Verghis, the bank's top economist for Southeast Asia said Wednesday.
"The revision from 5 percent to 3.9 per cent now just shows how much change the world, including Thailand, has seen since April," Mr. Verghis said.
"The earlier forecast was before Lehman Brothers collapsed in September, before the street protests and the recent shutdown of Bangkok airports which had a significant impact on investor confidence and tourism," he said.
His assessment is reflected Thailand Economic Monitor, a bank review of the Thai economy issued twice yearly by the World Bank in April and December.
For two years, Thailand has banked on double-digit export growth to drive the economy, compensating for sluggish domestic consumption and private investment. Threatened global recession means that such growth may not continue next year, and the bank expects overall world trade to decline in 2009 for the first time since 1982.
"The impact of the global meltdown on Thailand's real sector will be severe," said Kirida Bhaopichitr, the Bank's Senior Country Economist for Thailand.
The World Bank sees Thai exports growing by only 8 per cent next year, compared with 19.5 per cent growth in 2008 and 17 per cent in 2007, with consumption and investment expected to continue falling.
However, Thailand's banking sector has been less impacted by what the World Bank calls "the U.S.-born global crisis". Since 1997, Thailand has taken significant steps to limit its exposure to external shocks.
Thai regulators also implemented reforms in the financial sector and strengthened financial institutions, with the country's banking sector now stable despite the global crisis. In addition, Thailand has high foreign reserves and a low debt burden, helping to reduce vulnerability to external financial shocks, with room to adjust to the changing global environment.
If Thailand properly manages its opportunity, it is well placed to take advantage when international growth resumes, the World Bank said.
Thailand should take this opportunity to improve competitiveness and prepare to take full advantage of the global recovery expected in 2011 or 2012," Mr. Kirida said.
The World Bank recommends that Thailand invest in public infrastructure to attract investment and reduce logistics costs; in training workers with skills needed by industry; and in research and development to increase the value of Thai products.
Government should continue improving regional trade integration and modernising business to reduce the cost of doing business, encouraging businesses to expand and provide jobs.
"It is crucial to encourage more private investment, but investors may still be reluctant to invest," Mr. Verghis said.
"Investors normally want to see a stable political environment and clear policy direction before they gain enough confidence to start investing again," he said. (TNA)
BANGKOK, Dec 10 (TNA) - The global economic downturn and domestic political uncertainty may continue to weigh on Thailand's growth in 2009, with the World Bank predicting the country's economy will expand by just 2 per cent next year -- the lowest rate since 1998.
In addition, the bank revised its forecast on Thailand's growth in 2008 to 3.9 per cent - down from the 5 per cent it projected in April, Mathew A. Verghis, the bank's top economist for Southeast Asia said Wednesday.
"The revision from 5 percent to 3.9 per cent now just shows how much change the world, including Thailand, has seen since April," Mr. Verghis said.
"The earlier forecast was before Lehman Brothers collapsed in September, before the street protests and the recent shutdown of Bangkok airports which had a significant impact on investor confidence and tourism," he said.
His assessment is reflected Thailand Economic Monitor, a bank review of the Thai economy issued twice yearly by the World Bank in April and December.
For two years, Thailand has banked on double-digit export growth to drive the economy, compensating for sluggish domestic consumption and private investment. Threatened global recession means that such growth may not continue next year, and the bank expects overall world trade to decline in 2009 for the first time since 1982.
"The impact of the global meltdown on Thailand's real sector will be severe," said Kirida Bhaopichitr, the Bank's Senior Country Economist for Thailand.
The World Bank sees Thai exports growing by only 8 per cent next year, compared with 19.5 per cent growth in 2008 and 17 per cent in 2007, with consumption and investment expected to continue falling.
However, Thailand's banking sector has been less impacted by what the World Bank calls "the U.S.-born global crisis". Since 1997, Thailand has taken significant steps to limit its exposure to external shocks.
Thai regulators also implemented reforms in the financial sector and strengthened financial institutions, with the country's banking sector now stable despite the global crisis. In addition, Thailand has high foreign reserves and a low debt burden, helping to reduce vulnerability to external financial shocks, with room to adjust to the changing global environment.
If Thailand properly manages its opportunity, it is well placed to take advantage when international growth resumes, the World Bank said.
Thailand should take this opportunity to improve competitiveness and prepare to take full advantage of the global recovery expected in 2011 or 2012," Mr. Kirida said.
The World Bank recommends that Thailand invest in public infrastructure to attract investment and reduce logistics costs; in training workers with skills needed by industry; and in research and development to increase the value of Thai products.
Government should continue improving regional trade integration and modernising business to reduce the cost of doing business, encouraging businesses to expand and provide jobs.
"It is crucial to encourage more private investment, but investors may still be reluctant to invest," Mr. Verghis said.
"Investors normally want to see a stable political environment and clear policy direction before they gain enough confidence to start investing again," he said. (TNA)
