Finance Ministry raises growth forecast
Thailand’s economy is looking rosier as the Ministry of Finance raised its forecast for growth this year to an average of 3.6 percent and possibly higher on the basis that government spending on infrastructure projects will serve as an accelerator with ripple effects across many sectors, as the Ministry of Commerce also said it would take concrete steps to increase ease of doing business.
“We estimate the country’s GDP’s growth at 3.1 per cent to 4.1 percent this year.
That will be better than the country’s economy growth of about 3.2 percent last year,” Krisada Chinavicharana, director-general of the Fiscal Policy Office of the Finance Ministry, told reporters last week.
Krisada said that the government’s budget for fiscal 2017 will be higher than last year’s budget and that disbursements for construction or upgrades of most the double track rail system, Bangkok mass transit rail lines, motorways and airports will take place this year. Those would serve as important drivers of higher growth, he said.
Furthermore, global commodities prices have been rising and that should give Thailand’s farmers and businesses associated with agriculture more income and increase their spending power, boosting consumption, which is another important pillar of growth in the Thai economy.
Exports are the major driving force in the economy, and although growth in exports will be modest this year, that will still represent an improvement over the past two years during which exports contracted because of economic weakness in several of Thailand’s traditional markets.
“However, our estimate has to be concerned about recent economic developmdent. It has to closely monitor what may impact our estimate, especially the new economic policy of the new U.S. President Donald Trump, and global economic growth this year,” Krisada said.
Meanwhile, Deputy Commerce Minister Sontirat Sontijirawong said the ministry will modernize its work and its role as a regulator so more businesses can be established and allowed to grow in the country.
The ministry’s Business Development Department plans to shorten the period it takes to approve a business formation through an electronic registration system from about the current 10 days to just four days.
“This new procedure should be implemented by May and that should help save time and the cost in doing business in the country,” he said.