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Published on March 13, 2008

The FPO had projected 4.5-5.5 per cent but the latest developments suggest that the economy was doing better, director-general Pannee Sathavarodom said yesterday.

The government's economic stimulus package would contribute to higher growth due to the expected rise in consumption, while step-ups in private investment would also fuel economy, she said.

The downside risks remain the oil price and baht appreciation.

The FPO assumed an average oil price of US$80-$85 a barrel but it now exceeds $100. The office was uncertain whether the crude oil price would fall within its forecast range. Higher oil prices will stoke inflation, which surged 5.4 per cent last month. The FPO estimated inflation at 4 per cent this year.

The FPO will soon propose to the finance minister to set up a national savings pool to ensure adequate welfare for old people, she said.

Firms employing at least 100 workers would be the first group required to participate.

Employers and employees would each be forced to contribute at least 3 per cent of monthly salaries.

Over the next five years, firms employing at least 10 staff would be brought into this new savings pool. It will cover about 13 million workers in its first phase of operation, and raise Bt30 billion a year.

Retirees now receive only 17 per cent of their last monthly income while the rate should be up to 50 per cent in order to maintain their standard of living, she said.

The ministry would help finance mega-projects by creating Vayapak Fund II or the Infrastructure Fund, which foreign investors would be invited to buy into. The formation of the fund is expected to be early next month after the Asean Finance Ministers meeting in Vietnam.

Wichit Chaitrong

The Nation