World Bank lowers Thailand's GDP growth estimate

The World Bank on Thursday revised down its forecast for Thailand's economic growth in 2007 from 4.6 percent to 4.3 percent, citing consumers and investors had slowed spending due to a lack of confidence in political developments and economic policy, according to the Thai News Agency.

Kirida Bhaopichitr, a country economist at the World Bank's Bangkok office, said in a report on "Monitoring the Thai Economy" released twice annually that the bank had decreased Thailand's GDP growth projection to 4.3 percent from the 4.6 percent forecast in November last year.

The downward revision was made because the bank sees that household consumption, as well as private and state investment in the country, had slowed down because of the political uncertainties and the ambiguous economic policy adopted by the current government.

The bank projected that private consumption this year would expand only 3.5 percent. Although inflation and interest rates as well as oil prices would drop, consumers still lack confidence and have slowed their consumption.

Private investment is expected to expand 4 percent because investors slowed their investment to wait for a clear direction in the political development and various policies of the government.

State investment is forecast to grow only 4.2 percent because of slow budget disbursements, a delay in mega-project implementation, and less investment budget allocation than that of last year.

The bank also projected Thailand's imports this year would increase 5.9 percent to 137.94 billion U.S. dollars since the private sector needs to import more inventory products while exports would grow slowly at the same rate to 141.04 billion U.S. dollars because of a slowdown in the global economy and trade partners' economies.

Thai exports would be also affected by the continued appreciation of the baht from an average of 37.80 bath to the US dollar last year.

Source: Xinhua