According to BoT Assistant Governor for Monetary Policy Group Paiboon Kittisrikangwan, the Thai economy would expand continuously since the beginning of the year, and the whole year’s expansion would be about 3-5%.

Meanwhile, the inflation rate in the country would remain high as the average headline inflation rate would be around 2.5-4.5% following the estimation of higher prices of products and increasing labor cost.

The core inflation is projected to move around 2-3% in accordance with pricing movements of energy and fresh foods. The estimated figure was dropped a bit after the government had indeffinitely extended its relief measure for free electricity use.

Nevertheless, the assistant governor continued that risk factors that would affect the estimate included economic recession of Thailand’s trading partners, the global economic slowdown and the political uncertainty in the kingdom.

The Prime Minister on Wednesday disclosed that the government had been trying to restore investors’ confidence after the anti-government rally took place during the past months. Investment safety and remedial measures for affected businesses have been highlighted by his government.

The Prime Minister stresses that foreign investment is essential for the Thai economy. He urges the sector to continue using the country as its production base.

Following the government’s retention of the Emergency Decree, Mr Abhisit reasoned that the prolonged imposition of the decree was only to make sure that the country is free of serious crimes and that the development can continue. The Emergency Law does not deprive the rights of the people, the Prime Minister stressed.

He added that the government economic policy was deemed successful considering growth in national economy despite internal political risks and economic crisis in Europe.

The Thai economy is speculated to expand by 4.5-5.5 % after the government stimulus policies are utilized. Mr Abhisit, however, is confident that the overall expansion will reach 6% in 2010.

Prime Minister Abhisit Vejjajiva is putting an emphasis on expediting and monitoring the progress of government measures implemented to stimulate the economy.

According to Mr Ampon, the Thai premier also voiced his concern on drought problems, citing that insufficient water will affect the seasonal and off-season rice production next year. The progress on alleviating drought problems will be presented to Mr Abhisit at the meeting next week. In addition, the prime minister has also assigned the monitoring of finances, investments from the private and public sectors, the external economic crisis, tourism, government reimbursement, GDP rate and its targeted growth of 6%.

Regarding the government’s relief measures to assist low-income earners, the free bus ride measure that will expire on 30 June 2010 is expected to receive a six-month extension. This is speculated to help solve the rising inflation in the second half of the year. Free electricity bills on the other hand is not expected to be extended, according to Mr Ampon.

Mr Korn stated that a curfew enforcement would negatively affect the economy and the movement of people, stating that the government should only invoke the security law during nighttime in order to enable security officers to separate terrorists from normal citizens.

People will be prohibited from leaving their residences in the designated time, and their safety will not be ensured for violation of the security law. The Center for the Resolution of Emergency Situation (CRES) earlier planned to impose a curfew in some areas but decided to scrap its plan on Sunday afternoon.

The minister then expressed his concern on damages of properties of private businesses and lives of people during the ongoing political unrest, stating that people’s lives would be used to bargain with the government.

Mr Korn added that a prolonged demonstration could surely harm the economy in the long-term.

FTI President Santi Vilassakdanont, said the Thai economy has been recovering well as a result of the economic stimulus Strong Thailand Scheme of the government. However, many industries were facing a labor shortage as they had increased their production to correspond with the increasing sales, the president said. Although about 1.5-2 million more foreign workers have been recruited, at least 300,000 more are needed to compensate for the shortage.

Mr Santi added that the shortage had not been strongly felt yet but some operators had started to complain. He explained that this was because their sales had increased following the improving economy.

The FTI president also warned Thailand to keep abreast of the global and US economies following the US Federal Reserve’s decision to increase the discount rate to 0.75% to tackle inflation.

The Director of Macroeconomy Stability Analysis Division Dr Pisit Puapan stated that 3.5% expansion in 2010 economic tendency was from the recovery of global economy. Thai exports would grow in appropriate direction. However, the global economy was relieved from volatility and that would need to be monitored closely for the rise of inflation rate in face of recovered economy and economic competition as well as the rise of oil price.

Dr Pisit indicated that the investment disruption in Map Ta Phut still influenced the confidence of the private sector and Thai economic improvement of 0.2-0.5%. In case the government could set the resolution framework of the investment with acceptable environmental effects as soon as possible, the problem would be eased up.

By the way, Mr Pisit said that budget disbursement under the Strong Thailand scheme by 80% could shore up the Thai economy and the growth of GDP . He added that the policy interest rate was expected to be adjusted to 0.25-0.5% in the latter half of this year which would be proper to support the Thai economic expansion.

FPO Director-General Satit Rungkasiri said the GDP is expected to expand 3.5-4 per cent for this year, but the growth is likely to reduce by 0.5 per cent to 3 per cent if there was a delay in efforts to solve the investment project suspension in the Map Ta Phut Industrial Estate.

The heightened political situation is another key risk factor that could dampen Thailand’s economic growth in addition to a slower-than-expected budget disbursement.

He said the global economic situation needed to be closely monitored because it could experience a slowdown again.

FPO spokesman Ekniti Nitithanprapas said the economic conditions in the fourth quarter of 2009 continued to pick up with exports turning to grow 11.9 per cent with a value of US$43.3 billion against the contraction of 17.7 per cent in the previous quarter.

Key export destinations include China, Japan, India, and the Association of Southeast Asian Nations (ASEAN). Imports grew 0.3 per cent, the first time in the year, with a value of $40.3 billion. Most imports are raw materials used for producing goods for local sale.

The general inflation rate in December increased to 3.5 per cent, fuelled by the government’s measures to reduce people’s living costs and low oil prices. (TNA)

Speaking at a panel discussion on “In-depth Analysis of Hot Stocks: Opportunities for Well-Off from Thai Stocks,” Maris Tharab, president of ING (Thailand) Asset Management Co., said that given the improvements in economic signals now, he believes the Thai economy has already bottomed out.

Domestic purchasing power has already begun to increase because the public is daring to spend more.

Simultaneously, the government’s plan to apply its 2009 budget of about Bt115 billion and another Bt800 billion in loans meant to stimulate the economy through development of transport routes and the purple-line  electric mass transit system would cause money to flow into the economic system in a larger amount.

These combined actions will enable the Thai economy to begin recovering late this year and clearly pick up in 2009.

He said the Stock Exchange of Thailand (SET) composite index had risen at a slower pace than many countries in the region since early this year although the value and earning growth of stocks are now more attractive than before.

Because of this, he predicted that the Thai stock market will be more bullish than the exchanges in neighbouring countries in the second half of this year.

Thanawat Polvichai, director of the University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Center, said the Thai economy had already hit bottom.

However, the economy would not recover in a “V” shape as the prime minister projects, but would instead possibly recover in a “U” shape because investors and tourists remain worried about local political woes and external risk factors.

Nevertheless, if the Thai Khem Keng (Stronger Thai) project is successfully implemented, it would contribute greatly to the country’s economic recovery. (TNA)

FTI chairman Santi Vilassakdanond said the government had managed to get enough funds from issuing its executive act and order seeking a substantial loan of Bt800 billion.

The amount, coupled with the 2010 budget, is sufficient for the government to jump start the economy.

Regarding the Thai Khem Kaeng (Stronger Thai) project, Mr Santi said the government must attempt to the best of its ability to implement it as planned.

The project, if successfully implemented, would help create millions of new jobs, which he said could make the Thai economy recover “noticeably”.

Mr Santi said various industrial-sector indices as well as the consumer confidence index had begun to rise.

However, it is the government’s duty to stimulate the economy on a continual basis.

On mounting concerns over the stronger baht, the FTI chief said the Thai currency had strengthened partly because the capital from the United States and Europe had flowed into the Southeast Asian region. (TNA)

However, there remain key negative factors to Thailand’s economic recovery, including political divisiveness and concerns at the stability of a shaky government.

During the overseas road shows, he said, foreign investors still question political uncertainty in Thailand. It is considered a weakness when compared with neighbouring countries such as Indonesia, Singapore and the Philippines where political divisiveness is not the case.

Rising oil prices are another negative factor that should be monitored because it is expected the global fuel prices would climb to surpass US$70 per barrel.

The oil price hike stemmed from higher market demand as a result of the global economic recovery. It would fuel production costs of listed companies.

To maintain the production efficiency, he said, the listed firms needed to find ways to manage the costs.

Mr Pakorn forecast the daily trading volume in the Stock Exchange of Thailand (SET) would increase from an average of Bt8 billion to Bt16-17 billion because foreign investors and institutional investors had increased their trade on the market. (TNA)