The Thai economy in 2011 will not return to crisis despite impacts from rising oil prices, inflation and higher goods prices as well as effects from the European and US economies, Prime Minister Abhisit Vejjajiva said
He explained that the types of economy-related troubles are likely to change, such as fluctuation of oil prices, inflation, and rising consumer goods prices, and warned that the global economy, particularly in Europe and the US, must be closely monitored.
Domestic politics, strong local currency and rising interest rates will be key factors affecting the Thai economy this year. [Thailand ETF Recovers From Unrest.]
The Thai baht will continue to rise as more foreign capital flows in to the domestic financial market, but the stronger currency is a double-edged sword because it could slow what has been a strong export business.
Already, the forecasts call for export growth of 11.7% this year, down from 25.1% last year, ETFs for Getting Your Asia Fix.]. [
On the plus side, though, Suttinee Yuvejwattana for Bloomberg says that while export growth may indeed slow, domestic consumption and foreign investment will be stronger drivers as tighter monetary policy will slow manufacturing into the new year.
Thai economy likely to grow 3 to 5% in 2011
The Thai economy is likely to grow 3-5 per cent next year given the continued economic growth in November and the fourth quarter of this year, according to the Bank of Thailand (BoT).
Mathee Supapongse, senior director of BoT’s Domestic Economy Department, said Thailand’s improved economic growth will make the economy expand 7.3-8 per cent as expected for this year.
However, the Thai economy still faced such risk factors as the US economic uncertainties, public debt crisis in Europe, and local political woes in a run-up to the general election next year.
He said the continued rise in the policy interest rate did not obstruct the economic expansion since the rate is still not high although it was raised by 25 basis points at the latest meeting of the Monetary Policy Committee (MPC) in December.