the Thai economy in 2014 is likely to expand by 1 percent, a drop from 1.5 to 2 percent that was forecast previously by the Office of the National Economic and Social Development Board (NESDB). In 2015, however, it is projected to expand by between 3.5 and 4.5 percent.
Deputy Transport Minister and NESDB Secretary-General Arkhom Termpittayapaisith said that the predicted growth rate of 1 percent was resulted mainly from the lower-than-expected growth of the Thai economy in the third quarter.
The global economy in the third quarter of 2014 expanded less than in the second quarter, especially the United States and the Chinese economies, while the Japanese and the European Union economies remained weak. Agricultural export prices also declined significantly, causing the export value to contract following the expansion already seen in the second quarter.
The sales of passenger cars continued to decline, by 41.9 percent, while budget disbursement in the fourth quarter of the 2014 fiscal year was at 20.8 percent, lower than the 25 percent target. The disbursement rate for the entire 2014 fiscal year stood at 89 percent, which was lower than the 95 percent target. The recovery of tourism remained slow, as reflected in the lower-than-expected tourist numbers in the third quarter.
As for 2015, the world economy is expected to grow by 3.6 percent, a slight increase from 3.2 percent in 2014 because of stronger recovery in several major countries. A stronger global economy in 2015 should also boost the world trade volume, which is projected to increase by 4.8 percent, higher than 3.8 percent in 2014.
NESDB expects that exports are likely to grow by 4 percent, private consumption expenditure by 2.6 percent, and investment by 5.8 percent. Inflation is expected to be in the range of 1.4-2.4 percent, compared with 2.1 percent in 2014. The current account surplus will remain in surplus of around 2.2 percent of GDP.
The Thai economy in 2015 is likely to accelerate from 2014 because of an improvement in the export sector in line with the further recovery of the global economy. The tourism sector and investment situation will pick up, together with an increase in government expenditure. Other factors include a drop in crude oil prices, and less base effect caused by an unusually high volume of car sales and production.
However, there remain some risk factors and limitations which could reduce the economic growth below its potential level. These include currency movements and economic policies in major economies, the fluctuation of currency and the volatile global economy, and dampened household income caused by the slump in agricultural prices.
Even so, the status of the economy will remain sound in 2015, as a result of lower inflationary pressures and a continual surplus in the current account.