Deputy Prime Minister MR Pridiyathorn Devakula is more upbeat about economic prospects in the second quarter, saying the economy could grow 4% if exports manage to eke out zero growth or move in a positive range during that period.
In his round-up of the government's six-month performance yesterday, he said he believed exports to China and the EU would strongly recover in the second quarter, helping to shore up overall shipments for the period.
First-quarter exports were estimated to contract by 4% due mainly to the bearish performance of major markets such as China, the EU and Japan.
"I believe the economy will manage growth of 4% in the second quarter only if shipments can manage zero growth," he said.
Late last month, the Commerce Ministry reported exports fell for a second consecutive month in February, down 6.14% year-on-year to US$17.2 billion after January’s figures fell by 3.46% to $17.2 billion. The dip was attributed mainly to lower global oil and crop prices.
Shipments of farm products fell by 12.5% year-on-year in February to $2.49 billion, particularly rubber, which declined 38.8%.
Other major products including rice, sugar and canned and processed seafood also saw big declines in exports in February.
Exports of industrial products including gold and oil fell by 3.7% to $13.8 billion.
Gold exports plunged 66% as traders delayed shipments and shifted focus to imports, while oil shipments dipped 6.1% from February 2014.
However, imports edged up 1.47% to $16.8 billion, leading to a trade surplus of $390 million compared with a deficit of $457 million in January.
For the first two months, exports totalled $34.5 billion, down by 4.82% year-on-year, with imports down 6.69% to $34.5 billion.
The National Economic and Social Development Board on Thursday reported to the weekly economic ministers’ meeting chaired by Prime Minister Prayut Chan-o-cha that first-quarter growth could come in at 3%.
Growing tourism, recovering private consumption and private investment and accelerated government spending would be the drivers.
It is maintaining its economic growth forecast at 3.5% to 4.5% for this year and export forecast at 3.5% growth for the full year.
Public expenditure was estimated to grow 2.5% from the same period last year, with public investment rising 5%.
MR Pridiyathorn said public investment in the second quarter was likely to grow much faster than the first quarter now that contracts for small projects under the 23-billlion-baht stimulus package had all been signed, while contracts for the road construction projects worth 40 billion baht would be ready to be signed this month.
Private investment was also expected to grow 4% in the first quarter, as a number of new factories are about to start operating and existing factories are expanding production.
The government expects household consumption to fare better in the second quarter after growing 2.4% in the first quarter.