The University of the Thai Chamber of Commerce (UTCC) yesterday raised its forecast for GDP growth to 3.3% from an earlier 3%, citing accelerated investment by the government and political stability after a peaceful referendum.
Thanavath Phonvichai, vice-president for research and director of the UTCC Center for Economic and Business Forecasting, said the economy has shown positive signs recently.
He noted a rise in consumer confidence for the first time in seven months in July, an improving manufacturing production index, positive inflation, a lower than expected drop in exports and easing drought conditions.
The prices of certain farm products have also gradually recovered, while state megaprojects are expected to move forward smoothly after the vote approving a new charter.
He predicted second-quarter economic performance would surpass that of the first quarter, when GDP growth hit a three-year high of 3.2%, spurred by stimulus measures and bustling tourism.
"The economy in the following quarters is expected to become more promising after the peaceful referendum, as people, particularly foreign investors, see this will lead to greater political stability," he said.
Mr Thanavath said the passing of the referendum is expected to benefit the overall economy and boost the confidence of both local and foreign investors, as they believe a general election will definitely be held in the near future.
However, he remained concerned about the price of certain agricultural products such as rubber, maize and tapioca, which are still relatively low, as well as overall poor exports.
The UTCC cut its forecast for exports this year to a contraction of 2.1% from a 0.8% expansion earlier.
The Commerce Ministry reported last month that exports fell by only 0.1% year-on-year in June to US$18.1 billion after sliding by 4.4% in May and 8% in April.
Imports declined by 10.1% to $16.2 billion after edging up 0.5% in May following a 14.9% plunge in April.
Thailand had a trade surplus of $1.96 billion in June -- the 14th straight month with a surplus.
The ministry reported exports of agricultural and agribusiness products shrank by 7.9% to $2.58 billion in line with slowing demand in the world market and relatively low oil prices.
The drop was led by rubber (-23.2%), tapioca products (-36.3%), sugar (-8.7%) and rice (-0.2%).
Exports of industrial products bounced back to expand for the first time in three months, up 3.1% to $84.3 billion after dropping by 2.8% in May.
The increase was mainly driven by cars and car parts, electric circuits, air conditioners and hard-disk drives.
For the first six months, shipments shrank by 1.6% year-on-year to $105 billion, while imports totalled $92.7 billion, a fall of 10.2%. Thailand had a trade surplus of $12.4 billion for the period.