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Published on March 28, 2008

The estimate has risen from 4.5-5 per cent to 5-5.5 per cent for this year, giving credit to the government's economic-stimulus package.

The change is in line with recent upward revisions by the Bank of Thailand and the National Economic Development Board.

Higher estimates of economic growth will pave the way to better consumer confidence and expansion of private investment in Thailand.

Thanawat Polvichai, director of the university's Economic and Business Forecasting Centre, yesterday said the government's stimulus package was expected to inject between Bt40 billion and Bt60 billion into the economy in the second half of the year.

"The injected funds will increase domestic consumption and stimulate private investors to spend their money to expand business growth," he said.

Moreover, the injection of Bt20 billion into the Small, Medium and Large (SML) Loan programme will boost consumption nationwide.

Other positive factors raising GDP this year are higher agricultural-goods prices, lower interest rates and the beginning of mega-project investment, as well as continued export growth, which is expected to rise 12.5-15 per cent.

Thanawat said many positive factors should benefit growth, because Thailand would not rely solely on exports like in past years.

However, exports are still the main engine driving economic growth, accounting for 65-70 per cent of GDP.

Worrying factors that could slow economic growth include exorbitant oil prices, further strengthening of the baht, higher consumer-goods prices and the conflict in the deep South.

Petchanet Pratruangkrai

The Nation