Growth forecasts rising as exports hit record high
As Thai exports hit a record high of $21.8 billion for the month of September, the University of the Thai Chamber of Commerce and the Ministry of Finance said the economy would grow by close to 4 percent this year, with the central bank governor adding that solid growth is spreading across all sectors of the economy.
Exports rose 12.2 percent year on year for the month of September, the eighth straight month of increases after two years of stagnation as shipments to virtually every market increased, according to Minister of Commerce Apiradi Tantraporn. Through the first nine months of the year, exports have surged by 9.3 percent, well above the 5 percent target set by policymakers at the start of 2017.
Thailand has earned a total of $175.4 billion from exports during that period, while imports cost the country $163.2 billion for a trade surplus of $12.2 billion. Both industrial and agricultural exports have performed well.
A few days before the statistics were released, the University of the Thai Chamber of Commerce (UTCC)’s Center for Economic and Business Forecastingrevised its forecast for the economy upwards, predicting it would grow at by 3.9 percent his year, by 4.2 percent next year, and then average between 4 and 5 percent per year through 2021.
The Ministry of Finance concurred with the UTCC forecast, with Permanent Secretary Somchai Sujjapongse saying that growth should approach 4 percent this year. However, increasing investments from the private sector and local administrations would be necessary to achieve that level, he said.
International financial institutions have been predicting that the economy will grow by roughly 3.5 percent this year, but most have described the Thai economy as accelerating from a firm foundation. The Thai Rating Information Service, the domestic equivalent of international rating agencies, cited external risks that could affect the global economy and flooding in rural areas of Thailand as reasons for keeping its forecast for this year at 3.6 percent.
Local investors and entrepreneurs, however, have been demonstrating their confidence in the country’s economic revival by establishing more new businesses. New business registrations rose by 8 percent year on year in September, according to the Ministry of Commerce.
Bank of Thailand Governor Veerathai Santiprabhob credited his institution’s “very accommodative” monetary policy as a factor fueling growth that he said is being enjoyed by all sectors of the economy and across the entire country.
“We have seen increasing confidence in the recovery of the Thai economy and improving investor confidence,” Veerathai said in an interview in Washington D.C. last week, adding that there have been strong inflows of funds from overseas investors into Thai stocks and bonds.
Demand from Thailand’s traditional export markets is strong enough to overcome the strong Thai currency, the baht, he insisted. Veerathai said the central bank would let the market determine the value of the baht unless there were clear signs of speculation affecting the currency’s movements.