The Bank of Thailand has cut its 2007 Thailand's economic growth forecast to between 4 - 5 percent from a range of 4.5 - 5.5 percent, the Thai News Agency reported Saturday.

Assistant Central Bank Governor Suchada Kirakul was quoted as saying that The lower growth rate is due to the contraction in private consumption and investment, especially in the first quarter of this year. Investors are reluctant to commit new investment outlays, preferring to wait and see, she added.

However, the country's exports are likely to perform better than last year, up by 7.5 - 10.5 percent as a result of buoyant economic prospects in key markets.

Import is expected to grow at a slower pace as world oil prices fall while inflation is expected to decline, hovering around 1-2 percent, which could allow the central bank to cut interest rates further this year, according to Kirakul.

As a result, the central bank said that both the trade balance and the current account would turn into a surplus instead of a deficit as it forecast in October.

According to the Bank of Thailand, the current account would likely post a surplus of between 2.5 billion U.S. dollars and 4.5 billion U.S. dollars this year, compared with an estimated deficit of 3 billion U.S. dollars to 6 billion U.S. dollars for 2006.

Meanwhile the trade balance would likely record a surplus of between 2 billion U.S. dollars and 4 billion U.S. dollars, compared with an estimated deficit of 4 billion U.S. dollars to 7 billion U.S. dollars.

Source: Xinhua