World Bank expects improved performance for Thai exports
The ripple effects of the strengthening United States economy should result in an improved performance for Thailand’s exports in 2017, the World Bank said last week as it raised slightly its growth forecast for the Kingdom to 3.2 percent next year.
“We’ve raised the forecast mainly due to exports, which are expected to perform better on the back of a strong U.S. economy in 2017,” said Kiatipong Ariyapruchya, the World Bank’s senior economist for Thailand.
The election of Donald Trump as the next president of the U.S. has sparked a stock market surge and general optimism in the U.S. business community based on expectations that his policies will be pro-business and lead to higher growth. The Federal Reserve recently raised interest rates for the first time in years on signs the economy is heating up.
A strong U.S. economy would most likely have ripple effects, creating more demand and consumption that could benefit Thailand’s diverse menu of exports.
Exports have long been the engine that drives the Thai economy, but Thailand’s economic planners have been working to rebalance the economy so that consumption and investment play larger roles.
Kiatipong said that exports of Thai merchandise have been showing signs of recovery in recent months, and stronger global demand is the main reason for that. The World Bank is now predicting Thai exports will grow by 1 percent in 2017, up from the 0.4 percent that it has predicted for this year.
The launch of major infrastructure projects in Thailand next year will also impact the Kingdom’s growth in a positive way, the Bank said. The government in partnership with the private sector is building over $60 billion worth of new infrastructure, and several of the projects will begin construction in 2017.