Thai economy rebounding in wake of flooding crisis

BANGKOK, January 31 (TNA) - The Ministry of Finance's Fiscal Policy Office (FPO) says that the Thai economy is rebounding and is now projected to grow by some 5 per cent on average this year, after a worst flooding crisis in the country late last year. FPO Director-General Somchai Sajjapongse acknowledged Tuesday that the flood-battered Thai economy has kept rebounding since December 2011, after its bottoming out a month earlier, with improving key economic indicators, including private consumption and investment, the government's value added tax (VAT) which rose by nearly 10 per cent in December 2011, after contracting by 1 per cent in November, and imports of capital goods which expanded by 13 per cent in December, after shrinking by 4.1 per cent in November. Overall, Somchai assessed, the Thai economy should grow by 5 per cent on average in 2012, after expanding by 2 per cent in the first quarter, 3 per cent in the second quarter, 5 per cent in the third quarter and 7 per cent in the fourth quarter. According to the FPO chief, Thai exports have also been expanding with an only 2-per cent contraction in December 2011, from up to 14.4 per cent contraction a month earlier, signalling the country's improving production capacity, the manufacturing production index or MPI in December 2011 shrank by 25.8 percent, compared to 47.2 per cent a month earlier, and the domestic farm and tourism sectors have also been recovering; while inflation now remains at 3.5 per cent, unemployment rate at 0.8 per cent and foreign exchange reserves at 17.5 billion US dollars, representing a stable economy. The FPO chief cautioned, however, the ongoing European debt crisis, lingering economic problems in the United States, impacts from elections in powerful nations, domestic political developments and natural disasters remain risk factors of the Thai economy, which, in a worst case, could lead to a 0.8 contraction in Thailand’s gross domestic product (GDP) growth in 2012. (TNA)