The Nation (16 Nov 2007)
The World Bank has called on the new Thai government to be formed after the December elections -- probably in February -- to take assertive steps to clarify state policies to quickly restore the country's waning investor confidence and to move ahead quickly with already planned mega-investment projects to stimulate the sagging economy. Kirida Bhaopichitr, World Bank economist for Thailand, said the bank projected the Thai economy as growing by 4.3 per cent this year, the lowest in five years -- since 2002, as local consumption and investment had slowed considerably.
The economy next year is expected to expand by 4.6 per cent, performing only marginally better than this year, but many risk factors must be closely monitored, Thai News Agency reported.
The risks include rising oil prices, an accelerating inflation rate likely to stay at 3 per cent, a slowdown of exports, baht appreciation to 34 to the US dollar, and continued political ambiguity.
Kirida said investors and the public alike are waiting to see indications of a clear direction regarding the policies of the new government, which would have an impact on their confidence.
The bank believes that the new government should step up efforts to address the ambiguity of state policies to restore the investor confidence and increase investment urgently as it sees private investment is a key to the country's economic recovery.
In addition, the government should follow through with the already planned mega-investment projects, clarify the Foreign Business Act amendment, and relax the 30 per cent reserve requirement to restore investor confidence.
It should provide measures to ease the impact of the stronger baht on industry, deregulate investment procedures, liberalise services in some industries, and develop Thai labour skills to maintain competitiveness.
Kirida said Thailand's exports are likely to be negatively affected by the slowdown of the global economy and the economies of trading partners.
The bank projected that exports would grow only 7.2 per cent next year, and that the value of exports in dollar terms next year would be lower than this year due to the stronger baht.
But exports next year are expected to grow 10.5 per cent after experiencing a contraction this year.
It would result in the current account surplus next year reducing to US$5.7 billion or 2.2 per cent of the gross domestic product.
The economy next year is expected to expand by 4.6 per cent, performing only marginally better than this year, but many risk factors must be closely monitored, Thai News Agency reported.
The risks include rising oil prices, an accelerating inflation rate likely to stay at 3 per cent, a slowdown of exports, baht appreciation to 34 to the US dollar, and continued political ambiguity.
Kirida said investors and the public alike are waiting to see indications of a clear direction regarding the policies of the new government, which would have an impact on their confidence.
The bank believes that the new government should step up efforts to address the ambiguity of state policies to restore the investor confidence and increase investment urgently as it sees private investment is a key to the country's economic recovery.
In addition, the government should follow through with the already planned mega-investment projects, clarify the Foreign Business Act amendment, and relax the 30 per cent reserve requirement to restore investor confidence.
It should provide measures to ease the impact of the stronger baht on industry, deregulate investment procedures, liberalise services in some industries, and develop Thai labour skills to maintain competitiveness.
Kirida said Thailand's exports are likely to be negatively affected by the slowdown of the global economy and the economies of trading partners.
The bank projected that exports would grow only 7.2 per cent next year, and that the value of exports in dollar terms next year would be lower than this year due to the stronger baht.
But exports next year are expected to grow 10.5 per cent after experiencing a contraction this year.
It would result in the current account surplus next year reducing to US$5.7 billion or 2.2 per cent of the gross domestic product.
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