IMF:Thai economy will keep growing gradually

BANGKOK, March 29 (TNA) - The US-based International Monetary Fund (IMF) has projected that the Thai economy will continue expanding gradually, with its growth rates in 2016 and 2017 likely to stand at about 3 per cent and 3.2 per cent on average respectively. According to the IMF's report on economic forecast for Thailand in 2016, which was issued by the Bank of Thailand (BOT) on Tuesday, rising people's confidence in the Thai economy, along with low global oil prices should help boost private consumption in the country, while the Thai government's investment in mega-projects should also be a major force in boosting the national economic growth to the forecast levels in 2016 and 2017, after its growth rate standing at 2.8 per cent in 2015. The IMF report said Thailand's inflation rate is projected to turnaround to positive this year, as domestic demand is rising. However, the IMF report indicated that risk factors remain in the Thai economy, especially external factors, including impacts from China’s economic reform, which could slow down the immense Chinese economy and its trading partners consequently, while the volatility of the global financial market could cause capital outflows. Besides, the Thai government’s disbursement of budgets for its mega projects, if delayed, could affect domestic demand, while inflation, if contracted much longer than earlier expected, could cause domestic interest rates and real debts to increase, which might affect domestic demand and financial institutes in the country. IMF, thus, proposed three measures to keep the Thai economy growing in both short and long-term, including implementing relaxing macro economic policies in line with both the short and long-term national economic growth, stabilising the domestic monetary policy and boosting the potential of the Thai economy. IMF also proposed that the Thai government raise the value-added tax (VAT) to 10 per cent, from 7 per cent now, after the recovery of the national economy. Meanwhile, the private-run Thailand Development Research Institute (TDRI) assessed that the government's new round of economic stimulus, the third one, should boost the country's gross domestic product (GDP) by 0.1–0.2 per cent or by 0.2–0.4 per cent if the government-sponsored "Pracharat" housing programme for low-income earners were included. (TNA)