Saturday, October 20, 2007

Thailand narrows ‘07 economic growth forecast range

BANGKOK: Thailand’s central bank narrowed its 2007 economic growth forecast to 4.3-4.8 percent on Friday from 4.0-5.0 percent predicted three months ago after signs of recovering consumption and investment in the past few months.

“Domestic demand was gradually improving owing to greater political clarity, continued fiscal stimulus, low inflation which helped maintain consumers’ purchasing power and accommodative monetary policy,” the Bank of Thailand (BoT) said in a statement.

“This signalled that domestic demand should have a greater contribution to economic growth going forward while exports would slow down in line with trading partners’ economic growth,” it said.

Gross domestic product growth this year could ease to the low end of the bank’s adjusted forecast range of 4.3-4.8 percent if the average Dubai crude oil price this year exceeded $80 per barrel, BoT Assistant Governor Suchada Kirakul told reporters. The latest Reuters poll in September showed analysts expected the economy to grow 4.2 percent in 2007, which would be the weakest in six years, after 5.0 percent growth in 2006. Thai stocks, which closed the morning session flat, were down 0.9 percent shortly after the announcement.

The BoT narrowed its mild inflation forecast for this year to 1.8-2.3 from 1.5-2.5 predicted in July, but raised inflation expectation for 2008 to 1.5-2.8 percent from 1.0-2.5 percent which compared with 4.7 percent last year.

“Revised key economic forecasts by the Bank of Thailand reflected more concerns about inflation pressure amid higher oil and food prices,”SCB economist Usara Wilaipich said. reuters

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