Thai economy likely to continue growth despite political uncertainties

10:16, March 22, 2011      

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By Sinfah Tunsarawuth

Thailand's economy is expected to continue its growth despite global economic troubles and domestic political uncertainties, Thai government officials and businessmen said on Monday.

High unemployment rate in the United States and high public debts in the European nations continued to hurt purchasing power of consumers in developed nations while political crisis in the Middle East and North Africa has pushed up global oil prices, speakers at a Euromoney conference said.

Domestically, a new general election can now be expected as soon as in the next few months.

"As I stand here today, I can safely say that we've come through the global financial crisis which hit us in 2009 when the economy contracted by 2.3 percent," Prime Minister Abhisit Vejjajiva told Thai and foreign investors at the conference.

Abhisit said economic indicators in 2010 and the first few months this year showed Thai economy has recovered and further growth could be expected.

"The nation's economy of last year expanded by 7.8 percent year on year," the premier said. "And all the indicators of January and February that we have - whether it is tax collection, commercial car sales, growth of exports - suggest that there're various momentum for further growth."

But Abhisit said one of the challenges Thai economy was facing now was rising inflationary pressure, which he said increasing prices of goods and services could hurt consumers' confidence.

The Bank of Thailand has raised its policy rate several times recently to curb inflation.

But Finance Minister Korn Chatikavanij said at the same conference that he doubted the effectiveness of such interest increase as the current inflation factor was not spurred by demand such as rising property prices or speculation in the stock market.

Korn said Thai farmers have been enjoying higher income from rising prices of agricultural products such as rubber, tapioca and sugar.

The higher income was shown in increase in motorcycle sales, value-added-tax collection and farmers' bank savings in the provinces outside Bangkok.

Speakers at a panel on Thai economic outlook in 2011 at the same conference also agreed that though domestic political uncertainties could affect certain sectors, overall economy was likely to enjoy growth.

William Heinecke, chairman and chief executive of the Minor Group, which owns various hotel and restaurant chains in Thailand and overseas, said the anti-government "red-shirt" rally in April and May last year hurt the country's tourism industry heavily in the third and last quarters of the year.

But Heinecke said there are signs showing strong recovery of the tourism sector in the first few months of this year.

Piyasvasti Amranand, president of Thai Airways International, the national carrier, said, "Political turmoil remains a risk in Thailand."

Supporters of the nationalistic "yellow-shirt" People's Alliance for Democracy (PAD), who seized the two airports in Bangkok for over a week in late 2008, have been encamping near the Government House for almost two months now in protesting what they saw as the Abhisit government's mishandling of a border dispute with Cambodia.

PAD's rival, the red-shirt United Front for Democracy against Dictatorship (UDD) has been holding rallies twice a month in Bangkok to call for justice for the 91 people killed during their protest last year.

Apart from the uncertainties arising from PAD and UDD assemblies, the upcoming general election also adds to the unpredictability of Thai politics.

"Yes, we do live in uncertain times," said Abhisit at the conference titled "The 5th Annual Euromoney Thailand Investment Forum: Continued Growth in Uncertain Times."

"And one uncertainty that we will deal (with) is the election that's due in a few months' time," he said.

The premier has said for a few times already that he would seek to dissolve the House of Representatives by the first week of May, but he has not set a date for the next election yet.

"We believe that a number of policies and initiatives that we have undertaken over the last couple of years will be supported by the people," the premier said.

Source: Xinhua

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