The Finance Ministry's Fiscal Policy Office (FPO) says political tensions have delayed both government and private investment and it hopes demand for exports will be sufficient to help Thailand's economy grow.

Export growth in February expanded by 12 per cent year on year while imports climbed by 13 per cent, resulting in a trade deficit of about US$1 billion (Bt39.2 billion), Naris Chaiyasoot, the office's director-general, , estimated yesterday.

Naris said exports were likely to be the sole engine for economic growth because domestic investment and consumption would be affected by the current political turmoil.

He added that he was optimistic that the continuing economic recovery in Japan would also help give Thailand's exports a welcome boost.

The Bank of Japan recently announced the end of its ultra-low interest policy after the country's economy has finally started expanding.

The Fiscal Policy Office forecasts export growth of  9.5 to 10.5 per cent this year, while imports will expand 8.5 to 9.5 per cent, he said.

The FPO issues monthly forecasts while the Commerce Ministry later announces the actual figures.

Naris conceded that the office's forecasts for January were significantly at odds with reality.

Import growth was only 2 per cent year on year following a forecast of 10.9 per cent; exports expanded by 13.6 per cent after a forecast of 17.2 per cent; and the actual trade deficit was $442 million, compared with a projection of $985 million.

The good side of the figures was that the country imported less crude oil, steel and gold, while the bad side was that imports of raw material and capital goods eased, showing signs of slower investment, he said.

If these trends continue for three months, the office will revise its full year projections, said Ekniti Nitithanprapas, the Fiscal Policy Office's economist.

Naris said to make forecasts more accurate, the office had developed new tools for its monthly economic assessments.

These include charts for import and export management, inflation management, fiscal management, financial management, employment management, manufacturing price index, agricultural price index management, tourism management and global economic management.

Naris said the new tools would enable the ministry to prepare in advance for economic management.

Wichit Chaitrong

The Nation