The economy will grow faster in the second half of this year as farmers will earn more incomes and the effects of government stimulus measures take hold, the Thai Chamber of Commerce said on Tuesday.
Growth should expand by 3.3% in the latter half on the back of a 2.6% rise in exports and 0.9% inflation, said chairman Isara Vongkusolkit, who also heads the Board of Trade of Thailand.
Based on the forecasts, he said the economic growth rate for 2016 would be in a range between 3.2% and 3.5% while exports would expand by 0.8% and inflation would be at 0.4%.
The prices of commodities, including farm products, would rise in accordance with oil prices, which should return to normal levels in the second half due to higher demand and lower supply, he said.
The prices of rice, rubber and oil palm, the main products of Thailand, are likely to rise, lifting the purchasing power of farmers. The factor will support the economic growth in the second half of 2016, he said.
Other positive factors are government stimulus measures, export recovery signs, increasing tourism investment by the private sector, accelerated disbursement of government budgets and outlays, low policy interest rate of 1.5%, implementation of infrastructure projects and development progress of special economic zones along the borders, he said.
The negative factors include prolonged drought, strict lending by financial institutions in the wake of rising non-performing loans, the European Union's termination of trade privileges and possible ban on Thai fishing products, as well as China's decision to cut imports.
Meanwhile, Chen Namchaisiri, chairman of the Federation of Thai Industries, said the Thai Industries Sentiment Index rose to 86.4 in May from 85 in April as eased drought concerns had positive impacts on the processing of farm products.
The improvement was also supported by higher sales of education-related products ahead of a new school term in May and government policies that helped increase the value of industrial products including processed food, automobiles, medical equipment and electronic products, he said.
The forward-looking industries sentiment index over the next three months also rose from 97.2 in April to 98.7 in May as government investment, especially in infrastructure projects, bolstered confidence to follow suit among business operators, Mr Chen said.