Thailand’s 2011 economy is projected to grow 1.7-2 per cent instead of the previous forecast of 2.6 per cent, with an official figure to be announced in December, said Somchai Sajjaponse, director-general of the Fiscal Policy Office. 

Floods in several areas severely impacted the economy in October with auto sales dropping 38.8 per cent, compared to 13.3 per cent growth in the previous month.Thailand’s industrial index shrank 34.5 per cent. However, some industrial plants resumed production in mid-November, therefore the index is likely to improve in November and December, Mr Somchai said.

The Office of the National Economic and Social Development Board NESDB projected 2011 growth at 1.5 per cent while the 2012 economy is projected to expand five per cent, driven by the government’s plan to inject money for the development of basic infrastructure to prevent floods and Bt320 billion credit to be offered to entrepreneurs and the public.

The finance minister designated the year 2012 as Thailand’s investment year, with fiscal policy will be the main instrument of economic revival.Although the government has made a deficit budget of Bt400 billion, he said, the laws on foreign borrowing, public debt and loan guarantees for state enterprises allow additional borrowings of Bt400 billion. However, using the loans under the law may be delayed due to disbursement processes.

via 2011 GDP growth projected at 1.7-2 per cent: Finance Ministry.