Fourth-quarter growth projected to hit 5.5%

Business News - Saturday December 22, 2007

ECONOMY / FINANCE MINISTER UPBEAT

Fourth-quarter growth projected to hit 5.5%

WICHIT CHANTANUSORNSIRI

Fourth-quarter economic growth is projected to reach 5.5%, according to Finance Minister Chalongphob Sussangkarn.

The National Economic and Social Development Board is due to release official fourth-quarter figures on March 3. The state planning agency earlier this month announced that third-quarter growth would hit 4.9% year-on-year, with expansion for the first nine months at 4.5% from the same period last year.

Dr Chalongphob said the latest export figures released by the Commerce Ministry showed that the economy was continuing to expand strongly.

November exports rose by a stronger-than-expected 24.4% year-on-year to $14.72 billion. Exports for the first 11 months of the year rose 17.4% year-on-year to $139.21 billion.

Dr Chalongphob, commenting on recent calls by economists to increase deficit spending under the current budget to stimulate growth next year, said the existing fiscal 2008 budget was sufficient to push growth to 5% or more next year.

Chaiyawat Wibulswasdi, a former central bank governor and currently the executive chairman of Krung Thai Bank, proposed this week that the 2008 deficit be increased to 2.72% of GDP from 1.84% now to help increase state investment. Raising public investment by another 80 billion baht would help increase growth to 5.5% in 2008 from an estimated 5% under the current budget, he argued.

Dr Chalongphob said the decision on whether a supplemental budget should be passed would depend on the new government.

Tax revenues for the first two months of the fiscal year from Oct 1 exceeded the ministry's target, with value-added tax collections up strongly by 10% from the same period last year, indicating a pickup in consumption and confidence.

Bangkok Post