World Bank forecasts 3.5 percent growth for Thailand this year

TF June 8_4.pngIncreased tourism, lower oil prices and a stimulus provided by rising government spending should propel the Thai economy to 3.5 percent gross domestic product growth for the year, according to the latest forecast by the World Bank, as local agencies predicted industrial output would grow at a 2 to 3 percent pace and factory output would rise by 3 to 4 percent in 2015.

The gross domestic product (GDP) figure is a marked improvement over last year when the economy grew by an anemic 0.9 percent because of political turmoil that stymied government spending, prompted tourists to travel elsewhere and contributed to slowing exports. Exports have been falling, however, since 2012, and the World Bank said Thailand’s competitiveness in exports has been eroding. Exports have been the strongest piston in Thailand’s economic engine for several decades. Successive governments have tried with varying degrees of success to rebalance the economy towards more reliance on consumption and investment.

“Thailand has seen high growth in the past. Further improvements in competitiveness will be important for sustained economic growth and rising incomes for the Thai people,” said Ulrich Zachau, World Bank World Bank country director for Southeast Asia.

“Helping ensure that all Thais can enjoy a high quality education and acquire strong skills for the modern economy will be the key for increasing productivity and competitiveness. Organizing school networks so as to place good teachers in all classrooms throughout Thailand can make a big difference for Thai children and families, especially outside Bangkok,” Zachau added.

Thailand’s basic education is considered strong, and its literacy levels high. Comparing to a quarter of a century ago when only 10 percent of children from poor families attended secondary school, about 70 percent now attend.

However, reforming the education system away from rote learning towards critical and creative thinking has been an as yet unrealized goal of several Thai governments. It is being cited now with urgency as other nations in the region are developing and becoming more competitive.

Meanwhile, Director-General of the Office of Industrial Economics Udom Wongviwatchai said that GDP for the industrial sector rose by 2.3 percent during the first quarter of the year, and should achieve 2 to 3 percent growth for the year.

His agency expects the manufacturing-production index to rise by 3 to 4 percent this year on greater output of food, beverages, automobiles, auto parts, electrical and electronic products, chemical and petroleum products, glass, cement, tiles, ceramics, steel, garments and textiles.

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