The Office of the National Economic and Social
Development Board (NESDB) reported that the Thai economy in 2013 expanded by
2.9 percent. As for 2014, it projected that the Thai economy would grow in the
range of 3-4 percent.
NESDB explained that its assumption for the 2014
economic forecast was based on the world economic growth rate of 3.6 percent.
It believed that the improvement in the Thai
economy this year would be a result of the recovery of the export sector, in
line with the recovery of the global economy. Tourism is likely to play a vital
role in contributing to economic growth in 2014. Despite some impacts of the
political situation during the first half of 2014, the number of foreign
tourists is predicted to increase by 3 percent. In addition, the increase in
disbursement of government funds and the recovery of private investment are
likely to contribute to economic growth, as well.
The Thai export sector is starting to show a
clear sign of recovery and is likely to continue to grow at a faster pace. It
is expected that the export value will be able to grow by 5 to 7 percent, and
will be one of the most important supportive factors for economic growth in
2014.
According to the report, the investment
promotion policy will be made clear and effective in the second half of the
year, when the approval of applications for investment promotion is expected to
increase. International tourist arrivals in 2014 are likely to reach 27.5
million, slightly lower than the previous forecast of 28 million. Private
consumption expenditure is expected to grow by 1.4 percent, improving from 0.2
percent in 2013.
The NESDB report states that political
disturbances are likely to dampen consumer confidence further. In addition, the
unusual high base of domestic car sales during the first half of 2013 will
result in a decline in domestic car sales in 2014. It is thus predicted that
the sales of passenger cars will drop in the range of 38-48 percent in the
first quarter and 20-30 percent in the second quarter of 2014.
Private investment is likely to recover at a
slow pace, in line with the recovery of the overall economy. New investors are
likely to wait for clear directions in the political situation, new investment
promotion policies, and major public investment plans. Therefore, private
investment is expected to expand by 3.8 percent, lower than the 5.8 percent in
the previous forecast. Public expenditure is expected to grow by 2 percent and
public investment to grow by 0.3 percent.
Nevertheless, the prospects for overall economic
stability remained favorable. Inflation is likely to be in the range of 1.9-2.9
percent, provided that domestic demand does not pick up strongly, while crude
oil prices are likely to be stable. The unemployment rate is likely to be lower
than 1 percent. The current account will record a deficit of 0.2 percent of
GDP, an improvement from the deficit of 0.6 percent of GDP in 2013.
(thailand.prd.go.th)