Thailand's NESDB trims 2007 economic growth forecast to 4.0-4.5 pct
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BANGKOK (XFN-ASIA) - The National Economic and Social Development Board (NESDB) revised its growth projection for the economy for this year to 4.0-4.5 pct from a previous estimate of 4.0-5.0 pct, saying political uncertainty would affect domestic consumption and investment.
The government think tank's step is in line with moves by the finance ministry and the Bank of Thailand, which both slashed their 2007 growth figures citing low consumer and business confidence because of political uncertainties since a coup here last year.
The NESDB's revision comes after last week's decision by senior Thai judges to dissolve the political party formed by ousted premier Thaksin Shinawatra, which sparked concerns of unrest.
"Consumer spending, which has declined since last year, is likely to remain weak for the rest of the year while private investment has remained under pressure," said Ampon Kittiampon, NESDB secretary general.
"It is important that the government improves understanding and restores the confidence of the general public as well as domestic and foreign investors."
The NESDB reported gross domestic product (GDP) growth in the first quarter of 2007 at 4.3 pct.
Despite warning of rising oil prices, the NESDB also cut its inflation forecast, estimating that price rises will ease to 2.0-2.5 pct in 2007, down from a previous forecast of 2.5-3.0 pct.
The agency revised up export growth for the year at a gain of 12.4 pct to top 144 bln usd, up sharply from the original forecast of 7.9 pct growth.
"Exports have been on a rising trend in many markets, such as China, India, Japan and ASEAN," the NESDB said.
It warned, however, that the strong baht and the global economic slowdown are likely to affect the nation's exports in the second half of the year.
The Thai currency averaged 35.54 baht to the dollar in the first quarter, up 9.5 pct over the same period of 2006.
Imports are set to rise 3.8 pct to 136.4 bln usd in 2007, lower than that 5.0 pct forecast earlier this year, to give a trade surplus of 7.7 bln usd, up from the earlier estimate of 2.3 bln usd.
The current account, the broadest measure of trade in goods and services, also looks better than expected at surplus of 8.5 bln usd, up from the earlier projected surplus of a 3.1 bln.
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