Political stability key to revival, say firms
The Nation (19 October 2007)
The business sector believes political stability is more likely to be achieved in the second or third quarters of next year and remains the most crucial factor for companies, together with the baht level and diesel prices. In a poll by the Centre for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, 92.6 per cent of those surveyed expected political instability would remain for a short time. "They believed that politics would not become stable soon after the general election but would improve in the second and third quarters," Wachira Khuntaweetep, an economist at the centre, said yesterday. However, respondents mostly believed the business and economic picture would improve after the election, scheduled for December 23. Although 32.4 per cent of those surveyed plan to expand capacity in the future, improving from 4.8 per cent of those who are now expanding, most of them - 67.4 per cent - have decided to maintain existing capacity. The expansion expectations of respondents were also influenced by the current diesel price and economic conditions, while business performance and sales are expected to improve significantly in the second quarter next year. The private sector continues to adopt sales promotions and price strategies to lift sales in this year's fourth quarter amid continuing concern about the sluggish economy. According to the poll, the private sector - particularly the service sector - believes that its performance and sales will be worse in the fourth quarter this year, as costs will increase. Small companies will be worst hit. Director Thanawat Polwichai said the centre projected economic growth this year of 4.2 per cent, thanks to 14.1-per-cent growth in exports. The economy is forecast to expand by 4.6 per cent next year, when business confidence picks up and government spending accelerates in the second half. "Economic growth could exceed 5 per cent next year if the new government is stable, accelerating mega-project investments, boosting domestic demand and keeping export markets," he said. However, a crude-oil price increase would dampen the economy next year as it is expected to reach US$80 (Bt2,760) per barrel at the Dubai market, before gradually declining to an average of $70 in the first half of 2008.
The Nation (19 October 2007)
The business sector believes political stability is more likely to be achieved in the second or third quarters of next year and remains the most crucial factor for companies, together with the baht level and diesel prices. In a poll by the Centre for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, 92.6 per cent of those surveyed expected political instability would remain for a short time. "They believed that politics would not become stable soon after the general election but would improve in the second and third quarters," Wachira Khuntaweetep, an economist at the centre, said yesterday. However, respondents mostly believed the business and economic picture would improve after the election, scheduled for December 23. Although 32.4 per cent of those surveyed plan to expand capacity in the future, improving from 4.8 per cent of those who are now expanding, most of them - 67.4 per cent - have decided to maintain existing capacity. The expansion expectations of respondents were also influenced by the current diesel price and economic conditions, while business performance and sales are expected to improve significantly in the second quarter next year. The private sector continues to adopt sales promotions and price strategies to lift sales in this year's fourth quarter amid continuing concern about the sluggish economy. According to the poll, the private sector - particularly the service sector - believes that its performance and sales will be worse in the fourth quarter this year, as costs will increase. Small companies will be worst hit. Director Thanawat Polwichai said the centre projected economic growth this year of 4.2 per cent, thanks to 14.1-per-cent growth in exports. The economy is forecast to expand by 4.6 per cent next year, when business confidence picks up and government spending accelerates in the second half. "Economic growth could exceed 5 per cent next year if the new government is stable, accelerating mega-project investments, boosting domestic demand and keeping export markets," he said. However, a crude-oil price increase would dampen the economy next year as it is expected to reach US$80 (Bt2,760) per barrel at the Dubai market, before gradually declining to an average of $70 in the first half of 2008.
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