Herald Tribune
BANGKOK, Thailand: Thailand's economy grew a faster-than-expected 4.9 percent in the third quarter from a year earlier on higher exports and government spending, according to official figures released Monday.
Despite the baht's appreciation against the dollar, exports rose 11.6 percent in the quarter, according to the Ministry of Commerce.
The National Economic & Social Development Board raised its 2007 growth forecast to 4.5 percent from 4.0 percent, though this would still be a lackluster performance by regional standards. China is growing at more than 10 percent a year and Vietnam is expanding at more than 8 percent. Last year, the Thai economy grew 5.1 percent.
Still, consumers appear reluctant to spend and businesses are wary of making new investments amid the political uncertainty after last year's coup, despite a series of interest rate cuts, economists said. They believe the economy's prospects will likely be brighten once a new government is formed following upcoming elections on Dec. 23.
Economists polled by Dow Jones Newswires predicted that gross domestic product would expand 4.4 percent in the quarter. On a seasonally adjusted basis, the economy grew 1.5 percent from the second quarter.
The development board raised its forecast for 2007 exports growth to 16 percent from 13 percent to reflect better-than-expected trade numbers in recent months. The 2007 imports growth forecast was raised to 10 percent from 7.5 percent.
The agency's secretary-general, Ampon Kittiampon, expects exports growth to slow to 10 percent in 2008 but also expects the economy to get stimulation from government spending on infrastructure projects, low interest rates and from improved consumer and business confidence.
Higher oil prices are likely to increase inflation next year, he said, with the consumer price index forecast to rise 3.0 percent to 3.5 percent compared with the projected 2.3 percent increase this year.
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