Thai central bank: Economy projected to worsen in last quarter

BANGKOK, Oct 31 (TNA) - Hit by both the global financial crisis and
persisting domestic political problems, Thailand's economic growth is
expected to worsen in the fourth quarter as compared to the third quarter
this year, projected at slightly above 4 per cent, a senior Bank of
Thailand (BoT) official said Friday.

Domestic Economic Department senior director Amara Sriphayak said the
impact on the Thai economy -- earlier projected to hit bottom during the
first quarter of 2009 -- may now extend even further into the second
quarter.

However, the economy is expected to improve during the second half of
2009, Mrs. Amara said.

The business confidence index during the final quarter of 2008 is expected
to retreat to 47.4 from 47.9, while the investment index in the third
quarter is expected to grow only 2.6 per cent, the industrial output index
will
expand 7.7 per cent and the tourism industry will contract 16.5 per cent
as the number of foreign tourists visiting Thailand continues to fall due
to domestic political disruption and the global financial crisis.

Thailand's exports in September are expected to grow only 19.5 per cent in
value, but only 5.3 per cent in terms of volume.

Regarding the government's budget for Fiscal 2009, set at a Bt100 billion
deficit, Mrs. Amara said it could help jump start the economy. However,
she said it could improve the economy in the short-term only if it focuses
on consumption and on the long-term if it focuses on investment in
government-sponsored mega-projects on the condition that disbursement must
be made without delays as occurred last year.

Responding to calls for the BoT to cut its rate to stimulate economy and
exports, Mrs. Amara said the Monetary Policy Committee, scheduled to meet
for the last time this year on Dec. 3, is set to relax its monetary policy
if the global economy becomes less volatile.

The US Federal Reserve on Wednesday cut its benchmark Fed funds rate a
half-percentage point to 1 per cent with signs of more rate cuts to come
in future. The cut earlier this week has prompted analysts to believe that
the BoT would follow suit by cutting its one-day repurchase rate which is
now at 3.75 per cent. (TNA)