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129531
Thu, 06/24/2010 - 18:55
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http://m.oananews.org//node/129531
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World Bank lowers 2010 Thai economic growth forecast to 6.1%
BANGKOK, June 24 (TNA) – Thailand's economy was expected to grow 6.1 per cent this year despite political turmoil in March to May, without which it could have grown 7 per cent, the World Bank said.
The World Bank said a dramatic jump in exports during the first half of this year led to its projection for substantial gross domestic product (GDP) growth despite the anti-government protests and resulting street battles that left nearly 90 people dead and parts of the city in flames.
The bank's projection was better than the government's prediction of 4- to 5-per-cent growth.
'The good news is that Thailand continued to see a robust economic recovery in the first two quarters of 2010 despite the political turmoil,' World Bank economist Frederico Gil Sander said.
Thailand's exports grew 34 per cent year-on-year in the first five months of 2010 and were seemingly unaffected by the political instability.
The turmoil, however, was expected to have a greater impact on tourism this year, which could have seen 7-per-cent growth without the unrest, Mr Sander said.
Thailand's recovery comes from a low base as the economy contracted 2.3 per cent in 2009 when its exports plummeted to its main markets such as the United States and Europe, both hard hit by the global recession.
The World Bank attributed Thailand's high export growth so far this year to a recovery in its main markets and importers restocking their inventories.
However, these factors were not expected to sustain rapid export growth in the second half of this year, and prospects for 2011 looked worse.
The World Bank projected the Thai economy would grow 3.6 per cent next year as Europe's ongoing debt and economic woes were expected to contribute to the slowdown.
'If European countries are to avoid a deeper crisis, they must cut their deficits quite sharply, which will reduce demand in European countries for goods, including Thai goods,' Sander said.
A weak euro was also likely to result in fewer European tourists coming to Thailand, he cautioned. Europe is the main source of high-spending tourists in the kingdom.
The World Bank urged the Thai government to explore ways of reducing the economy's heavy dependence on the export sector for growth by boosting the service sector and improving access to higher education.
'The service sectors in Thailand have greatly underperformed compared to its peers,' Sander said.
Over the past decade, the service sector's contribution to GDP has diminished in Thailand whereas it has grown in China.
The bank argued that an expanded service sector would provide more high-paying jobs and create demand for better educated graduates.
'The agenda that needs to take place is education reform, both in terms of quality and access to education,' said Annette Dixon, World Bank country director for Thailand. (TNA)
The World Bank said a dramatic jump in exports during the first half of this year led to its projection for substantial gross domestic product (GDP) growth despite the anti-government protests and resulting street battles that left nearly 90 people dead and parts of the city in flames.
The bank's projection was better than the government's prediction of 4- to 5-per-cent growth.
'The good news is that Thailand continued to see a robust economic recovery in the first two quarters of 2010 despite the political turmoil,' World Bank economist Frederico Gil Sander said.
Thailand's exports grew 34 per cent year-on-year in the first five months of 2010 and were seemingly unaffected by the political instability.
The turmoil, however, was expected to have a greater impact on tourism this year, which could have seen 7-per-cent growth without the unrest, Mr Sander said.
Thailand's recovery comes from a low base as the economy contracted 2.3 per cent in 2009 when its exports plummeted to its main markets such as the United States and Europe, both hard hit by the global recession.
The World Bank attributed Thailand's high export growth so far this year to a recovery in its main markets and importers restocking their inventories.
However, these factors were not expected to sustain rapid export growth in the second half of this year, and prospects for 2011 looked worse.
The World Bank projected the Thai economy would grow 3.6 per cent next year as Europe's ongoing debt and economic woes were expected to contribute to the slowdown.
'If European countries are to avoid a deeper crisis, they must cut their deficits quite sharply, which will reduce demand in European countries for goods, including Thai goods,' Sander said.
A weak euro was also likely to result in fewer European tourists coming to Thailand, he cautioned. Europe is the main source of high-spending tourists in the kingdom.
The World Bank urged the Thai government to explore ways of reducing the economy's heavy dependence on the export sector for growth by boosting the service sector and improving access to higher education.
'The service sectors in Thailand have greatly underperformed compared to its peers,' Sander said.
Over the past decade, the service sector's contribution to GDP has diminished in Thailand whereas it has grown in China.
The bank argued that an expanded service sector would provide more high-paying jobs and create demand for better educated graduates.
'The agenda that needs to take place is education reform, both in terms of quality and access to education,' said Annette Dixon, World Bank country director for Thailand. (TNA)
